I have talked to several people this month who are buying land in our area with plans to have a home built in the near future.  As most of the questions are similar, I thought I would fill people in on Construction Lending in Wenatchee, Leavenworth and Chelan. 

First of all, its Winter here, which is very pretty, but if you didn't pour your foundation beforehand, you'll need to wait until it thaws.  Depending on where you are in the area, that can be anywhere from February to May.   Also, people who are finishing homes right now are generally moving in without exterior paint, stonework, patios, driveways or sidewalks; those things will be finished up in the Spring. These items are generally completed towards the end of the project, so if you are planning a new home which takes 6 months to build, and you start in July, guess what, you need to plan for this.

If you have never had a home built before, you need to make sure you are working with an experienced builder and lender who can help you through the process. You need to be working one-on-one with people you trust, because who is going to make sure that someone comes out in the spring to finish up those items, and how do they get paid?  We can handle all this, but I just want to emphasize that it is alot easier when the lender, appraiser, escrow company and builder all work and  live in the same market and know where to find each other; trying to move into your unpainted house in Wenatchee when your lender is in Texas, may pose some problems.  Owner-builders need to be especially careful, if it is not something you normally do. If a subcontractor gives you a quote, make sure he knows what time of year you plan to have him up on a ladder.  Just some things to think about.  I don't mean to put construction fears into people, it is a great thing to do, and it's the majority of my lending; I just want people to be smart and get some good advice.

Right now is a great time to be doing your planning; most builders in our area did not start new spec homes last fall (waiting to see where the market is going), as a result, they have more time right now to review your plans and give you bids.  I can't quote it here, as I only heard it 2nd hand, but I heard of someone quoting a cost per square foot today that was at a rate I hadn't heard in 3-4 years. 

As of today, all-in-one type construction loans were back down to levels we haven't seen since last Spring, and with the Prime rate coming down, the 'Construction-Only' loans are the lowest they have been in 2 1/2 years.  Combine these rates with some good builder quotes, and that new house becomes a reality.

For the details on how a construction loan works, see my Wenatchee Construction post.  One place to do your homework: the North Central Homebilders Association is putting on their annual Home Show.  There are no frying pans or kitchen knives, its all homebuilding related. Feb 8,9,10 in Wenatchee. You can get a dollar-off coupon and more info here.