The Property Appraiser Is Invaluable In Determining The Merits Of A Construction Loan

Posted on by Evan Craig


construction to permanent loan

A construction loan is not fully approved without all the essential details. The beginning of the loan process begins with an appraisal of the house plans and the land. The finished value based on the plans will determine the next course of action. Property appraisers are highly valued. They will begin by looking at the neighborhood and getting a broad view of what similar homes in the area are selling for. This is known as a comp, which is short for comparable. Comps are broad strokes. They tend to be focused on square footage, room counts, the age of the home, and land size.

Valuing from Inside the Home

The comps will help provide the appraiser with a number that makes sense to start with. Only then will the appraiser look at the secondary elements to the home for the final value on the home improvement loans. The most obvious is an upgrade. If the home has a kitchen or bathroom upgrade (or both), that is factored in. If it is has two stories, the appraiser will take note. He or she is adjusting that initial comp number accordingly. While the appraised value begins with the comps, it continues with the interior review. The report will also assess tax values, which are measured into the value report. All this information will help determine of the loan has merit.

They will also have a large single report for a new home construction. The main goal of the report will assess how much the new home or remodeling project will improve the homes value. Lenders want to know if the equity justifies the cost.

Main Obstacles

The appraiser information is added to a full report that organizes exactly how the construction project will go and how it will improve the property. The final decision on moving forward with a loan will depend on the answers to a few key questions. Firstly, is the investment viable? The homeowners may want a fourth bedroom addition, but is it adding enough value to a property? Some additions simply dont work. For example, if the construction is done in a bad neighborhood where comps are low, the major renovation may not be practical.

There is a lot to consider when building a house. The loan providers are fair and reasonable. The most important thing is that the customer is building the right home in the right neighborhood in order to get the most value added.

Personal Finance: Keeping Your Investing Wits during Uncertain Times

Posted on by Evan Craig

During times like the early 2000s and late 2000s, some investors abandon the stock market for good. Although some people who get burned badly discover that they’re not cut out for stock investing, everybody else should take stock of their investing approaches and adjust their practices and expectations.

In the early 2000s, the stock market began falling — with some growth stocks, especially technology stocks, plunging like stocks do in a depression. Layoffs mounted, and the September 11 terrorist attacks undermined consumer confidence. Then the general public found out that some major companies — Enron, WorldCom, and Global Crossing — pulled the wool over investors’ eyes with shady accounting techniques that artificially inflated earnings. Concerns about further terrorist attacks and war with Iraq (and perhaps other nations) hung like dark clouds on the horizon.

In the late 2000s, a global financial crisis, brought on by risky mortgage investments made by financial service companies, captured headlines and public attention. Major financial firms went bankrupt, while others required large capital injections from the government for their survival. Most global stock markets plunged in value by the largest amounts since the Great Depression of the 1930s. And the wars in Iraq and Afghanistan and associated spending lingered on and depressed the public’s mood, adding to a widening U.S. budget deficit.

There are many similarities between the early 2000s and the early 1970s, when a multitude of problems (that could not have been predicted) unfolded. The early 1970s saw record trade and budget deficits and inflation rearing its ugly head, in addition to the invasion of Cambodia, the Arab oil embargo, gas lines, and that period’s Arab-Israeli conflict — the Yom Kippur War. Vice President Spiro Agnew resigned over the exposure of his personal income tax evasion and acceptance of bribes while working in Maryland’s government.

Then news of Watergate broke, and Nixon’s impeachment hearings began. After flirting with the 1,000 level since 1966, the Dow Jones Industrial Average plunged below 600 after Nixon resigned in 1974. Many investors soured on stocks and swore off the market forever. That reaction was unfortunate because stocks are more than 20-fold higher today than they were back at their lows in 1974 (not even accounting for their dividends).

Don’t let a poor string of events keep you from stock investing. History has repeatedly proven that continuing to buy stocks during down markets increases your long-term returns. Throwing in the towel is the worst thing you can do in a slumping market. And don’t waste time trying to find a way to beat the system. Buy and hold a diversified portfolio of stocks. Remember that the financial markets reward investors for accepting risk and uncertainty.

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