We took the rough draft of the house plans to the flooring, countertop and paint guy today. he is an engineer, and is really good with visualizing spaces and seeing how to utilize them the best possible way. He helped us make the final changes to the plan so that everything in the house flows a lot better than it did.

We moved a couple of walls, changes the kitchen sink and the placement of a couple of windows. We also added a dog run that now goes into a “dog closet” in the mechanicals room for the pool equipment, furnace and hot water heaters. And, finally, we cut down on the size of the pool bathroom so that we could get a bar in the dining room. (I would much rather have to “GO” outside, that have to walk the 30′ into the kitchen to get a drink.) LOL

After we finalized everything, we called the architect so that he could add all of our changes into the house plans. But, of course, he is out until next week due to the holiday. Ahhhhh!

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I received the quote from the bank, telling me I could get a construction loan for $350,000 at 6.5% interest that rolled into a 5 year ARM fixed at 6.5%. They also offered a 1/1 loan, that doesn’t really mean anything to me. What it supposedly means is that I get a 1 year construction loan at 6.25% that needs to be turned into a final mortgage when the construction is done. I was a little afraid of that one though, because it looks to me like the market is going to crash and interest rates on mortgages are going to go through the roof about the time I have to refinance the construction loan.

I saw an article in the news a couple of days ago that said there were going to be like 2.2 million foreclosures this year, and a bunch of mortgage companies were going to go bankrupt due to all of the foreclosures. Capitol one shut their home loan company last week and put 1,900 people out of work. And, it looks like Countrywide is going to go bankrupt too. The whole mortgage world looks really scary to me right now, so I will probably go with a local bank.

The only thing that I really hate about the 6.5% loan with a 5 year arm is that if I go with it, I will have to pay loan origination fees when I refinance sometime within the next 5 years. But, unlike the 1/1 loan, at least I have 5 years to find the best rate instead of being forced to refinance the second the house is done.

Wait, there’s an update… I guess the local bank is out. LOL

I contacted 2 other local lenders to see what they had to offer, and heard back from one of them today. He offered a construction loan at 6.375% that rolls directly into a 30 year fixed at the same 6.375% rate. Man that looks good to me. I was thinking about not going with them because they are out of Spokane instead of Walla Walla, but my other bank called me just now and told me they wouldn’t OK my loan if I stayed with the builder I’m thinking about using as my construction consultant. That sure makes the decision a little easier right now.

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We went to one of the local banks that has been around Walla Walla for the last 1000 years or so and talked to a loan officer. My wife had gone in the day before and made an appointment and picked up all the fricken paperwork. It took us a couple of hours to get all of our financial history together in one place and fill out all of the appropriate info on the forms. (I would like to suggest here that you take copies of the forms after you fill them out so that you can use them when you are talking to the other 3 or 4 mortgage companies you are going to end up talking to to compare prices and fees.).

One of the main reasons I need to talk to a bunch of different banks and mortgage companies is because some of them won’t let you build your own house unless you’re already a contractor. Others make you use a licensed contractor, no-matter-what, while other will let you do it if you have a contract with a builder to check on your progress and keep you on track. The whole thing is a pain in the ass, but I shall persevere…. Whatever.

I did find out that you need to have “Course of Construction” or “Builders Risk” insurance to build a house. According to the people over at ASK.com, this is what is covered under a “Builder’s Risk” insurance policy:

Builders Risk is temporary insurance with coverage only during the construction or remodeling phase. Once the project is completed a permanent form of property insurance must be purchased.

Probably the most important thing you must understand about Builders Risk Insurance is that it doesn’t include any liability. Liability must be purchased separately.

More later….

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My wife and I sat down over 2 days and wrote everything we needed to change, in the margins of the rough draft of our house plans. Here is a partial list of what we had, followed by what we changed.

• When I told the architect that I wanted a huge shower, and no garden tub, he said, “OK, How Big”? I told him I wanted a shower that was at least 5′ by 8′, and he laughed at me. Now that I’ve seen how big a 5′ by 8′ shower is, I understand why he laughed. So, we changed the shower size down to about 4.5′ by 6′, and it looks a whole lot better. It also give us the room to put a whole row of floor to ceiling cupboards in the bathroom. (You can never have too many cupboards)
• As mentioned in the last post, we increased the garage size so that we get a couple of more feet on the back wall.
• We had a fireplace on the main wall in the living room, but moved it into the corner on the back wall, that way we can put a 60″ plasma TV on the main wall without having to hang it above the fireplace. I stayed at a place once where the television was over the fireplace, and my neck hurt for a whole week after I left. You can’t look up at a TV, while sitting down, without needing a whole handful of Advil for the next week.
• The wall where the fireplace was will now include a whole wall of built-ins… Kind of cool, but spendy.

Need to go and see what else has to be changed.

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We got the rough draft of the house plans back from the architect, and they look cool, but we are going to have to change a bunch of stuff on them to get everything where we want it. We increased the main floor size to about 2650, and are going to talk to the architect about increasing the garage size from 27.5′ wide by 24.5′ deep. We will probably change that to 27.5′ by 26′, so that we can have a little bit more room for junk….

I found out today, that I need to include everything in the house plans that are going to go in the house. Hmmm, I guess you can’t just wing it when you build something. LOL So, now we need to look at the house and plan where the cupboards are going to go, where all the built-in stuff needs to be etc…

So, that’s the end of week 2 with just about nothing done.

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It’s the end of week 1.

The taxes are now done, which means that I can send them off to the IRS and also take a copy to the mortgage company or bank of my choice. I haven’t decided who to have do my mortgage yet, because I’m still trying to figure out if I’m going with one mortgage to build with and then get a new one for my 30 year payback stint, or get a building mortgage that rolls over into my 30 year sentence.

The initial house plans are supposed to be done tomorrow so that we can look at them, and go “wow, I hate that house”, and then have to sit down and see where we went wrong. LOL

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I actually started this ball rolling a couple of years ago, and didn’t even know it. I had some money left over from the sale of my house, so I bought a lot and figured, “what the heck, I’ll have someone build a spec home for me some day.”

That was two years ago, I’m 2 years older, and not any richer or wiser. I’m also in need of a new house. So, instead of having a contractor or builder build my house. My wife and I decided to be our own general contractors and see how we like it. If all goes well, maybe I’ll build a house from time to time for the fun of it. If everything goes to hell, maybe I’ll move to the Bahamas and live on the beach. Who knows.

I’m counting today as day 1 in the house building process. Today we did three things.

1. We took the rest of the tax information to the accountant so that he could finish my taxes, because I’m going to need them to get a loan from the bank or a mortgage company.
2. We sat down with the architect and told him everything we want in our house, including how tall we want our ceilings, and the fact that we want a bonus room over the garage. He told us the bonus room is going to be a pain in the ass, and double his time in building the plans, but we have a couple of young children who need to be neither seen or heard. LOL
3. And finally, we went to an interior designer to pick out floor coverings, paint colors and counter tops. We actually started this last year, so it only took an hour, compared to the 2 weeks it took last year. (I’m not sure I still like the stuff we picked out last year. OH CRAP…)
• Last year we were going to go with a house that had 2000 feet on the main floor, and a 2000 foot unfinished basement. We changed our mind and decided on a house with no basement, 2500 square feet on the main floor, and a 300-500 square foot bonus room for the kids.
• We also decided to go with cheap granite look alike Formica counter tops, instead of the slab granite, because we want to put in the biggest pool we can get. We figure we can always upgrade the counter tops later, but it’s hard to add on to the pool. LOL

Check back every so often and see how it’s going. If you think I’m forgetting anything, or screwing something up really bad, let me know so that I don’t look like a complete ass… Please.

I’ll also be adding pictures of the lot, the views, and the contruction as it progresses, so think of this as your own free “How to Build Your Own House” book.

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