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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