It looks like we're actually going to close on the construction loan next week, and get started the week of August 11th. The appraisal has not been completed yet, so that's still a concern. The last appraisal came in at only 83% of the estimated construction costs. This was mostly due to the neighborhood and the high number of foreclosures there, which were used as comparable properties. I'm hopeful that the new appraisal will focus more on the construction costs than comparables.
Actually, the new loan is a better rate with better closing costs than the one I had (or almost had) before, so maybe it's all for the best. I hate getting started so late, though. I had planned to break ground in April, and now it's not going to happen until mid-August. I'm keeping my fingers crossed, hoping nothing else goes wrong and I actually close on the 7th.
Monday, July 28, 2008
Sunday, July 20, 2008
Mortgage Meltdown Hits Home
Things have been going fast and furious the past few weeks. My stress level has been way up, because my mom fell and broke her wrist a month ago, and two weeks ago had to have surgery to put in a plate because it wasn't healing correctly. So I've had to take 3 1/2 days off work in the past two weeks to take care of her and get her to doctor appointments. My full-time job keeps me very busy, and I've been getting behind with all the time off I've been taking.
The issue that has me the most upset is the call I got Friday from Contractors Capital Corporation, where I was getting my construction loan. This 45 day process has been ongoing for 3 months now, not due to any problems on my part. I am absolutely the perfect candidate for lending money to, in every respect. So what's the problem? First it was the loan officer got pneumonia and no one else could help me for the two weeks he was out. Then he sent me a slew of papers to sign, which had all the blanks left empty. I don't sign blank paperwork. That took another week or two to straighten out. Then there were problems with his appraiser, and the appraisal took an entire month. It finally got to the title company, and we were supposed to close this week. Until I got a call on Friday telling me the underwriter had withdrawn permission for CCC to write construction loans, effective immediately. So now I'm back to square one after three months of working with CCC. The only positive thing is that the bank that was underwriting CCC has taken over the construction loan business from CCC, so much of what has been done so far will transfer over. The really bad news is that MI Bank will NOT accept the appraisal that CCC had done, which I paid $450 for. So now I have to pay for a new appraisal with the same underwriter-now-construction-loan-lender, and have to worry once more about the house appraising way under the construction costs due to the neighborhood it's in. This is all related to the mortgage meltdown; after banks and mortgage companies spent years lending huge amounts of money to people who couldn't pay it back, now they are skittish about lending money to anyone. So this new development wasn't aimed at me, it's part of the overreaction by banks trying to cover their rear ends for their past irresponsible practices.
Adding to the stress are continuing conflicts with Richard, the architect. He has not been at all happy with changes Jeffrey Swainhart, my GC Consultant, and I have made. Some of the changes have been minor, but the major ones have Richard in kind of a snit. I am having Innovative Power Systems (IPS) do the solar, and most likely White Bear Mechanical will do the radiant in-floor heating. Richard has been set all along at having Norm Tesmar do both, but the guy can't give me any references, even though he supposedly has been doing this for 20 years. He isn't licensed, either, so he can't do it himself anyway. I have been unhappy with Norm and his complicated solar system with both tanks and an under-the-basement sand pit for heat storage. IPS is an established company. If I have problems, I'll know who to call, and I know someone will be there to answer the phone. In addition, I'm taking out the sand pit, as both IPS and Bob Ramlow (who wrote the book, literally, on solar heat and sand bed heat storage) have recommended against it in this case. It's also saving me about $5000, and now I don't have to worry about living above an oven in the lower level. The other issue is the skylight over the stairwell. Richard had initially designed a cupola over the stairwell, with an elevated roof with widows around it to let in light and ventilation. That turned out to be quite an expensive addition. Then Richard decided a large skylight, 5 feet by 20 feet, would be better. It wouldn't open, so he proposed adding a window in the rear gable, near the peak, to add the ventilation. I loved the skylight proposal, but it was going to be around $6000 just for the plastic skylight. There were many seams in it, which I didn't like. One seam goes bad and the whole thing starts leaking. I wanted to put in some regular skylights instead. Jeffrey came up with a good plan putting in three 3' x 4' skylights, with one being operable for ventilation. I feel more confident that this system will be less likely to cause problems (with leaking) over the long term.
So the bottom line on the project is that the new bank said it would be 2 to 3 weeks at a minimum to get the construction loan approved, so my plans to break ground this week have been put on hold.
I know that all projects have things go wrong, and I'm just hoping that I'm getting all the kinks out before we even start, and that once we start digging, everything will go relatively smoothly.
The issue that has me the most upset is the call I got Friday from Contractors Capital Corporation, where I was getting my construction loan. This 45 day process has been ongoing for 3 months now, not due to any problems on my part. I am absolutely the perfect candidate for lending money to, in every respect. So what's the problem? First it was the loan officer got pneumonia and no one else could help me for the two weeks he was out. Then he sent me a slew of papers to sign, which had all the blanks left empty. I don't sign blank paperwork. That took another week or two to straighten out. Then there were problems with his appraiser, and the appraisal took an entire month. It finally got to the title company, and we were supposed to close this week. Until I got a call on Friday telling me the underwriter had withdrawn permission for CCC to write construction loans, effective immediately. So now I'm back to square one after three months of working with CCC. The only positive thing is that the bank that was underwriting CCC has taken over the construction loan business from CCC, so much of what has been done so far will transfer over. The really bad news is that MI Bank will NOT accept the appraisal that CCC had done, which I paid $450 for. So now I have to pay for a new appraisal with the same underwriter-now-construction-loan-lender, and have to worry once more about the house appraising way under the construction costs due to the neighborhood it's in. This is all related to the mortgage meltdown; after banks and mortgage companies spent years lending huge amounts of money to people who couldn't pay it back, now they are skittish about lending money to anyone. So this new development wasn't aimed at me, it's part of the overreaction by banks trying to cover their rear ends for their past irresponsible practices.
Adding to the stress are continuing conflicts with Richard, the architect. He has not been at all happy with changes Jeffrey Swainhart, my GC Consultant, and I have made. Some of the changes have been minor, but the major ones have Richard in kind of a snit. I am having Innovative Power Systems (IPS) do the solar, and most likely White Bear Mechanical will do the radiant in-floor heating. Richard has been set all along at having Norm Tesmar do both, but the guy can't give me any references, even though he supposedly has been doing this for 20 years. He isn't licensed, either, so he can't do it himself anyway. I have been unhappy with Norm and his complicated solar system with both tanks and an under-the-basement sand pit for heat storage. IPS is an established company. If I have problems, I'll know who to call, and I know someone will be there to answer the phone. In addition, I'm taking out the sand pit, as both IPS and Bob Ramlow (who wrote the book, literally, on solar heat and sand bed heat storage) have recommended against it in this case. It's also saving me about $5000, and now I don't have to worry about living above an oven in the lower level. The other issue is the skylight over the stairwell. Richard had initially designed a cupola over the stairwell, with an elevated roof with widows around it to let in light and ventilation. That turned out to be quite an expensive addition. Then Richard decided a large skylight, 5 feet by 20 feet, would be better. It wouldn't open, so he proposed adding a window in the rear gable, near the peak, to add the ventilation. I loved the skylight proposal, but it was going to be around $6000 just for the plastic skylight. There were many seams in it, which I didn't like. One seam goes bad and the whole thing starts leaking. I wanted to put in some regular skylights instead. Jeffrey came up with a good plan putting in three 3' x 4' skylights, with one being operable for ventilation. I feel more confident that this system will be less likely to cause problems (with leaking) over the long term.
So the bottom line on the project is that the new bank said it would be 2 to 3 weeks at a minimum to get the construction loan approved, so my plans to break ground this week have been put on hold.
I know that all projects have things go wrong, and I'm just hoping that I'm getting all the kinks out before we even start, and that once we start digging, everything will go relatively smoothly.
Tuesday, July 1, 2008
Update on solar and other things
Okay, my theory on using PV for electric heat didn’t work. One of my assumptions was that using an efficient electric boiler to heat the water for radiant in-floor heating would use about the same amount of electricity as the rest of the house combined. This was a faulty assumption, as it would use way, way more. By using solar for thermal, I’m able to use about 80% of the energy from the sun. PV only is able to convert 10-15% of the energy from the sun into electricity, so it’s really inefficient. IPS estimated that I’d need about a 13kW PV array just for electric heat, so that’s way too inefficient. We’re back to thermal solar after a short detour.
I’m pretty sure I’ll go with IPS and their thermal solar drain back system, with a separate HVAC contractor doing the floor.
As I mentioned in my June 9th entry, cost overruns are killing me, and I was speculating on what I could cut to meet budget costs. I was just providing examples of the extra cost of building green; I’m not actually planning on cutting out any of the green features, like the solar, living roof, or metal roof. So far, the biggest cost cutting measure has been to buy the used kitchen, which gives me way more kitchen that I could have afforded new. My original estimate on kitchen cabinets was about $20,000, which caused me to scale back and reduce the number of cabinets (uppers, the lowers stayed) by about 40% to cut costs. Now I’ll have all the cabinets I need.
I’m definitely going to have to do more of the finishing work than I had planned, especially indoor and outdoor trim. I’m handy with tools, and I have a number of real carpenters as friends and acquaintances, so I’m reasonably sure I can get someone to show me what to do and I can do it myself. I own and have used a router saw, and most every other kind of saw needed for trim. I have friends who have volunteered to help some on the house, so if I can get everything ready myself, I have people who will help me with things that need more than one pair of hands.
I’ve temporarily cut out the back porch and pergola. We’ll lay the slab for the back porch and put in the footings for both the porch and pergola, but delay those unless I have more money left over than I think I have. The pergola I can do with help from friends; the back porch will need to be done by someone professional.
The other thing that I’ll probably do to save money is do the finishing on the MgO board, the green alternative to sheetrock. If it’s hung properly, I’m not supposed to have to mud and tape it, just use a filler. You can see how this is done on the MagnesiaCore website. I may have a hanging party (to hang the MgO board) to save even more money. MgO board is much heavier (and way stronger) than sheetrock, so there’s no way I can do it myself. I remember hanging sheetrock by myself in college (I rehabbed apartments for my landlord to pay for college), but I don’t know how I did it then, and I sure as heck couldn’t do it now. At my age, I don’t even think I could pick up a piece of sheetrock. Anyway, there’s only one job I detest more than finishing wallboard, and that’s plumbing of any kind. But finishing the wallboard would probably save me $10,000, so I may not have a choice.
The longer I take on this, the happier my mom is, since she does not want to move. She’s 84, and has lived in her current home for over 40 years. She doesn’t want to move, but knows she can’t stay there by herself when the house is completed. She’s the principal reason why the main floor is handicapped accessible. The other reason is that this is my retirement home, and I’ll need it that way eventually.
I’m hoping to close on the construction loan this week or early next week, and hoping to break ground next week (week of July 14th) or the week after at the latest.
Jeffrey Swainhart, my General Contractor consultant, has been more help to me than I could ever say. What a great guy, too! He’s nailing down the contracts, and has saved me at least $30,000 in the process. The most important thing, though, is that I’m not having to worry any more about contracts and how this house is going to get built.
Jamie Queissar, an architect student from Germany who is the nephew of a good friend of mine, is helping with the project, too. He’s done a cool 3D diagram of the house using Google’s Sketch-up. Hopefully, the house will be well underway before he has to go back to Germany to school.
Things are looking up. Looks like we’ll be breaking ground very soon.
I’m pretty sure I’ll go with IPS and their thermal solar drain back system, with a separate HVAC contractor doing the floor.
As I mentioned in my June 9th entry, cost overruns are killing me, and I was speculating on what I could cut to meet budget costs. I was just providing examples of the extra cost of building green; I’m not actually planning on cutting out any of the green features, like the solar, living roof, or metal roof. So far, the biggest cost cutting measure has been to buy the used kitchen, which gives me way more kitchen that I could have afforded new. My original estimate on kitchen cabinets was about $20,000, which caused me to scale back and reduce the number of cabinets (uppers, the lowers stayed) by about 40% to cut costs. Now I’ll have all the cabinets I need.
I’m definitely going to have to do more of the finishing work than I had planned, especially indoor and outdoor trim. I’m handy with tools, and I have a number of real carpenters as friends and acquaintances, so I’m reasonably sure I can get someone to show me what to do and I can do it myself. I own and have used a router saw, and most every other kind of saw needed for trim. I have friends who have volunteered to help some on the house, so if I can get everything ready myself, I have people who will help me with things that need more than one pair of hands.
I’ve temporarily cut out the back porch and pergola. We’ll lay the slab for the back porch and put in the footings for both the porch and pergola, but delay those unless I have more money left over than I think I have. The pergola I can do with help from friends; the back porch will need to be done by someone professional.
The other thing that I’ll probably do to save money is do the finishing on the MgO board, the green alternative to sheetrock. If it’s hung properly, I’m not supposed to have to mud and tape it, just use a filler. You can see how this is done on the MagnesiaCore website. I may have a hanging party (to hang the MgO board) to save even more money. MgO board is much heavier (and way stronger) than sheetrock, so there’s no way I can do it myself. I remember hanging sheetrock by myself in college (I rehabbed apartments for my landlord to pay for college), but I don’t know how I did it then, and I sure as heck couldn’t do it now. At my age, I don’t even think I could pick up a piece of sheetrock. Anyway, there’s only one job I detest more than finishing wallboard, and that’s plumbing of any kind. But finishing the wallboard would probably save me $10,000, so I may not have a choice.
The longer I take on this, the happier my mom is, since she does not want to move. She’s 84, and has lived in her current home for over 40 years. She doesn’t want to move, but knows she can’t stay there by herself when the house is completed. She’s the principal reason why the main floor is handicapped accessible. The other reason is that this is my retirement home, and I’ll need it that way eventually.
I’m hoping to close on the construction loan this week or early next week, and hoping to break ground next week (week of July 14th) or the week after at the latest.
Jeffrey Swainhart, my General Contractor consultant, has been more help to me than I could ever say. What a great guy, too! He’s nailing down the contracts, and has saved me at least $30,000 in the process. The most important thing, though, is that I’m not having to worry any more about contracts and how this house is going to get built.
Jamie Queissar, an architect student from Germany who is the nephew of a good friend of mine, is helping with the project, too. He’s done a cool 3D diagram of the house using Google’s Sketch-up. Hopefully, the house will be well underway before he has to go back to Germany to school.
Things are looking up. Looks like we’ll be breaking ground very soon.
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