This afternoon, my wife and I had our most expensive date ever! 

We closed on our construction loan!

Getting this loan was a long and painful process that involved an appraiser, our insurance lady (that we ended up dumping because she was messing everything up) and a few other big surprises.  I plan to document more at a later date, but here are the basics of what happened recently.

Last week, we had asked for an updated estimate of the closing costs.  Of course, there were all the usual “fees”, including flood inspection, etc.  The biggest of the recent surprises was that the bank wanted us to deposit all the money we planned to use, up front, in their account, so they could manage the disbursements and make sure it all goes into the construction.  The difference with this latest update was that the bank added 10% more to cover “unexpected costs”.  This was a significant jump that had not been included in previous discussions (they had been willing to accept that I had built safety factors into each line item).  We scrambled to figure out how to scratch together the additional money (imagine suddenly needing to find 10% of the cost to build your home).

We could have swung it, but I was worried about our shrinking liquidity (I still need to buy tools, rent equipment, etc. and those costs are not covered by the construction loan).  We ended up deciding to take some money out of our retirement savings plan.  We will need to start paying it back to ourselves immediately (it starts coming out of my next pay check) or face a tax penalty, but the interest rate (to ourselves) was good and there were no significant fees.  It was actually a pretty painless process and we put the paperwork together in about 20 minutes (Sherri and I working together).  We took a bit more than we thought we needed, just in case.  That check arrived yesterday.

 

Today started with Sherri still up from the night before going over the receipts that we have already paid.  I gave up and went to bed at midnight, but I assume she checked everything more than twice more (as is her nature). These receipts are required to support our “Sworn Statement” that says how much we have paid and how much we have left to pay.

We showed up for our lunch time appointment at the bank today with a big accordion-folder worth of paperwork.

The first biggest surprise was that we were expected to pay off the remaining mortgage on our land before the new loan would commence.  I had thought our land may come up since the appraisal was based on the house and land and I figured it may occur to the bank that they had already loaned us something, but I thought they would take the money out of what they were going to loan us now.  Instead it was added up front as closing costs before the other loan would go through.  Ouch.  Good thing we had more in the account that we thought we needed.  But this is a significant cut to our liquidity.

The silver lining is that we now own the land outright and no longer have that land payment.  Also, the new mortgage percentage went down a bit from the last estimate, so in the end, our payment is very reasonable (over 30% lower than we thought it would be for the house and land payments combined).

We spent over an hour signing papers.  Sherri is very thorough and likes to read everything; she found a number of mistakes, including her name spelled wrong several ways on a single page.  The lady at the bank had to make a number of runs back upstairs to reprint documents with corrections.  She was getting a bit tired by the end of it.

Eventually we got through it all and the Earth Sheltered Umbrella Home is fully funded.

Sourcing

I finally got the bill for the footings today.  It was a volume plus materials sort of deal, so I was a bit nervous about how the cost of materials would add up.  However, it did seem reasonable.  I am not thrilled about all the unused forming supplies that I bought.  I hope they don’t get wrecked by the weather before we can use them on the main floor footings (I have them covered with 6mil plastic at the moment).  The cost of the concrete was 6% lower than expected and the giant pump truck was 14% lower than expected.  Unfortunately, the rebar and other steel was 17% higher than expected, probably due to that 18% bump in the price of steel over the past year.   Overall, we are still on budget.

I also purchased a new 26ft tall scaffold tower today.  I had been trying to get a used one.  There were not many to choose from and most looked like rusty pieces of junk.  The worst part was they were priced only 30% below new.  I found one nice aluminum one for a reasonable price, but I called the guy and he had sold it for scrap.  In the end, I needed one next week, so I decided to pay a little more and get a brand new one, and that was for a “delux” model with the extra wide outriggers and other safety features.  It should arrive the middle of next week along with my steel studs (which were originally supposed to arrive last Friday).  I should be able to sell it at the end of construction for a reasonable price.

I had also been looking at buying turnbuckles to help me plumb the steel stud walls (tricky because I don’t have a top track to attach to).  I was looking at the sort of thing that ICF installer’s use to straighten and plumb their walls before a pour.  I found them to be very expensive, so I designed my own and priced it out.  I figure I can make equivalent hardware for less than 1/10^th the price of buying them.  The only catch is that I will need to buy that MIG welder sooner, but I planned to get it for the main floor steel anyway.

I have a 25% off coupon for a nice MIG welder (another thing I couldn’t find second hand), and will probably pick that up this weekend.

Construction Birds

Some of you may have caught my video on the river swallows at the construction site…  Here it is anyway.

Eye Candy

Yes, time for some eye candy.