Real Estate Articles

Unless you have all the cash you need, building a home will require some type of financing. In most cases, this financing is referred to as a construction loan. And banks can play a big role for you.

Construction loans are short term loans. They typically span only several months up to one year. They act as a bridge loan to complete your home until you’ve finished construction at which time they are paid off by replacing them with a regular home loan (usually a typical 30 year mortgage.)

YOUR LOCAL BANKER IS AN IDEAL SOURCE OF FUNDS

Ask your banker first. If you have an established relationship with your banker, very often something can be arranged for you to fund your home building project. Your banker, however, may not be set up to offer construction loans so you’ll need to approach him with this question before you go too far in your planning. Never assume, always ask.

If he cannot do it, he very well may know of another local bank which can help you. Bankers are in the business of loaning money. That’s how they earn their keep! Making wise and profitable loans is what keeps them in business. Yet, a construction loan is a special animal. On the one hand, the loan is a good one because it’s dealing with real estate and real estate, over the years, has proven to be excellent collateral.

On the other hand, if the lender is not experienced with construction loans, they may not want to take it on. There is a lot of extra time, effort, and paperwork involved with a construction loan that not only costs more to prepare and administer, but can also be confusing, creating potential problems that can eat away at the banker’s profits.

If the banker is experienced and eager to work with you, it might just be your best and least expensive choice for a construction loan. Over the years in the homebuilding business, I’ve been through a lot of situations. Let me recount some of the questions I’ve received. The answers should help you:

Q: What is involved in the qualification process when applying for a construction loan with a bank?

A: There is a lot more involved when applying for a construction loan than for a car, furniture, or even a home for that matter. Yes, of course, your income and credit ratings are important but your assets are also involved. The amount of cash on hand (in accounts and various investments) is also looked at. And he’ll also take into account the current value of the building lot as well as the future value of the land/home package once the home is built.

Q: How much down will the banker require before loaning the money?

A: Invariably, a banker wants a down payment. This is to demonstrate that you have a financial involvement and are not apt to walk away from the project before you’re done. After all, in construction, until the home is completed, there really isn’t much collateral there for the banker to recoup should you flake out! Often 20% is the minimum required but there are exceptions to this!

Q: Does my land have to be owned in full before the bank will loan me money?

A: The short answer here is “yes.” There are exceptions to this as well, but most bankers want the land as the only collateral they’ll have at first. Yes, and they WILL want first position on that land during the construction process. In some cases, the bank will count the land as part or most of the 20% + down payment requirement.

Q: Can I build the home myself without using a contractor?

A: Not likely. While other lenders may allow for this, it is extremely rare for a banker to go this route. He wants assurances that the home will be completed and completed on time and within budget. Owner builders do not have as good a record with this as licensed builders do. In fact, the banker may even want to approve the builder before he okays the loan.

Q: What if I run out of funds in the loan before the house is complete?

A: Find out up front what the bank’s policy is on this. It’s possible that additional money can be added but only if there is enough potential value in the finished product and you must be able to qualify for the bigger loan if money is added. Many times the bank will not provide additional money. You must be aware of the policy and know where additional money would come from should the need arise.

THE BANKER WANTS YOUR MORTGAGE AFTER YOU BUILD YOUR HOME

Most of the time the bank gives construction loans despite the hassle because they want your other business including the 30 year mortgage once the home is complete and you move in. While there are certain types of construction loans that automatically become mortgages at the end, often this isn’t the case and the banker is eager to get you to “convert” at the end of the construction loan.

Knowledge about lending and home building or remodeling will put you way out in front and ensure a great experience. Visit http://www.DreamHomeCreation.com for many tips and tools to help you achieve all the results you’re looking for and read more of Mel Inglima’s writings.

(c) Copyright 2008 Mel Inglima & Allied Business Solutions

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There exists much debate in the log home industry about the authenticity of manufactured log homes compared to traditional hand-hewn log homes. Some proponents of the hand cut log home school (and these are generally craftsmen who hand-cut logs and are experts in full-log custom construction techniques) will argue that a log house built using milled log is not an authentic log home. The majority of log home owner, who coincidentally own manufactured log homes, would likely argue otherwise.

So, at this point you may be asking what are the main differences between hand-cut log homes and milled or manufactured log homes. The fundamental difference between hand-cut and machine-cut log homes is that whole logs are used in handcrafted log structures. Machine-cut log homes are constructed with material that has been cut, planed and milled to create uniformity among the pieces. Some say this process removes most of the natural characteristics of the logs (which give the logs character). The hallmark of handcrafted log structures is the use of full length logs to build the walls. Machine-cut log structures may have butted joints within their walls.

In reality, the majority of log homes built today use manufactured or milled logs. If you were to ask any of the tens of thousands of manufactured log home owners if their home lacks the character or charm of a hand-cut log home, most would laugh hysterically and affirm their manufactured log home is every bit as rustic, charming and authentic as a hand-cut log home.

There are several very good reasons for the rise in popularity of milled or manufactured log homes. Probably the most important of which is affordability. Skilled craftsmen don’t come cheap. And unless you plan on falling your own logs, hand peeling them yourself and fitting all the logs together; this is time consuming, detailed and expensive work. There is a definite cost associated with this method of construction. Additionally, use of whole log means paying a premium for sufficiently large logs to do the job.

Today’s technology has made the milling process much more reproducible and economical. In the end, it comes down to personal preferences and budgetary considerations. And inevitably, if budget is a concern, milled logs can offer a very economical alternative. Remember this: When guests, friends and family come to visit your manufactured log home, most will comment on what a nice, charming log home you have and very few will comment that it’s too bad you didn’t go with hand-cut logs.

Ron Marx is president of Cedar Knoll Log Homes, a leading log home and log cabin manufacturer. Ron has more than 25 years of log home building experience. Cedar Knoll Log Homes has been designing and manufacturing custom and kit log homes and cabins since 1980. Cedar Knoll Log Homes’ corporate headquarters and 20,000 square foot state-of-the-art milling facility, along with a 1680 square foot beautifully appointed log home model, are situated just off the shores of Lake Champlain in Plattsburgh, NY. Cedar Knoll Log Homes uses only the finest Adirondack cedar and pine available and dries logs at the company’s onsite kiln. Prospective log home / log cabin buyers, builders, contractors, wholesalers or dealers are encouraged to call 800-644-3564 for additional information or visit http://www.loghomeslogcabins.com

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The tiny Mediterranean island of Cyprus has an appeal out of all proportion to its size. Especially for English speakers looking to buy an overseas property - for investment, retirement, holidays or holiday rental - Cyprus seems to come near the top for choice.

So what is the special appeal of buying a house in Cyprus? Many people find it combines ease of living with a special quality of mystery and beauty - and of course a gorgeous climate. Because the island underwent some decades of British rule, English is widely spoken, which makes it easy for English speakers to move to. At the same time, its almost unearthly beauty, combined with its history stretching back thousands of years and its connection with ancient myths and legends, provide a magnetic attraction for visitors.

But what’s involved in buying a house in Cyprus? Well, it’s not especially difficult, but there is a procedure you have to go through. (This process of course applies to the Republic of Cyprus, which excludes Northern Cyprus where the legalities are quite separate.)

So these are the main steps you need to take to purchase your property:

1. Every foreign national has to obtain approval from the government before buying a house in Cyprus - specifically from the Council of Ministers. This can take 8-14 months so you would be well advised to begin the process before you even start choosing your property.
2. Get a lawyer. It is not a good idea to try to do without and there are good bilingual lawyers in Cyprus - if in doubt, ask for a recommendation from expatriates in the area.
3. Once you have received your approval from the Council of Ministers, and have identified your property, you have to sign the preliminary contract, and post a holding deposit with a notary or with your lawyer. The deposit can be as little as 1 percent of the purchase price.
4. A secondary reservation deposit agreement will then be executed and the property will be taken off the market. As long as you stick to the agreement, it won’t be put back on the market again.
5. The lawyer will then investigate the title through the District and Registry Office.
6. Meanwhile you need to obtain your financing. Probably the easiest way is to finance through a bank in Cyprus. Most banks are quite westernized and will accommodate US and UK mortgage clients. Alternatively you may wish to refinance your existing home, or in the case of a new build the developers may offer their own mortgage facilities. Some people of course want to sell up in their home country and move to Cyprus to live. If you are doing this, you are very likely to find that the proceeds of your home are more than enough to cover the cost of buying a house in Cyprus.
7. Once the lawyer’s investigations are completed satisfactorily and you have your finance in place, the parties can move to the final contract stage. When this is signed by the parties it is filed with the Land Registry Office.
8. If one of the parties is a Cypriot, an application then has to be made to the Central Bank of Cyprus to approve the transfer of funds for the purchase of the property. If both parties are foreign nationals, this is not necessary.
9. If the property is not new, the title will be transferred to you and you are now the owner. If it’s a new build, the title will not be transferred for three years, though you are fully protected since the final contract is filed with the District Land Registry.
10. Relax and enjoy your holiday or retirement home. You can get by with speaking English, but if you can manage to learn some modern Greek you will find your experienced greatly enriched.

Buying a house in Cyprus is easier for foreigners than in many countries and is highly worthwhile in terms of both enjoyment and profit. One word of warning - some people are tempted to try to do private deals without bothering with the legalities or getting a title deed. Don’t even think about it. Not only could you get into trouble, but you could lose all your money as your property will be unsaleable. Be patient and stick to the law - it’s well worth it.

Elaine Berry is the owner of the Bizwrite Real Estate Service. For a selection of simply the best properties in Cyprus, come and visit http://www.bizwrite.co.uk/realestate/overseasproperty.html - If you would like to know how to refinance your home in order to buy your Cyprus property, you’ll find all the information at http://www.bizwrite.co.uk/realestate/lending.html

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