With the hot real estate market in Thurston County, homes are being snapped up as quickly as they are listed. For many home buyers, the low inventory leaves them feeling frustrated or disappointed in their search. But they have another option. Building their own home allows home buyers to customize it to fit their needs. They can also get the house they want in the area they want, instead of just trying to make something work. Olympia Federal Savings (Oly Fed) offers a number of products that can help homeowners looking to build.
Ben Paylor, branch manager for Oly Fed in Hawks Prairie, has a lot of experience in providing construction loans to his customers and knows the processes from the other side, since he is currently building his own home.
The loan process for building a home is pretty similar to buying an already built home. If a customer is qualified to buy a home, they are most likely qualified for a home construction loan.
There are a few differences though. The biggest difference, says Ben, is the additional planning that comes along with building a home. Additional documents are needed like the house plans, contractor bids and a description of materials used. “The appraiser then uses those items to come up with a future value of the home on the site,” says Ben.
Oly Fed has streamlined the homebuilding process by partnering with BUILT, a web based platform that speeds up construction draws and allows for simple budgeting. The platform allows borrowers, builders, other construction professionals, and the loan officer at Oly Fed to collaborate on a single platform, eliminating paper, email threads and multiple phone calls. This ensures that everyone is on the same page with the construction budget and construction timeline.
“The first nine months of the construction loan is categorized as the construction phase,” says Ben. During this time, the home is being constructed and there are generally inspections every three weeks. Funds are drawn out as the building project progresses. During that time, customers make interest only payments.
Once the home is finished, the loan is rolled into a permanent mortgage, in a one-step process that is very streamlined for the customer. “This saves costs,” says Ben, “because with the one step process, a second appraisal is not required.” A unique benefit to working with Oly Fed is that customers lock in the interest rate during the application process.
Oly Fed also offers a lot loan for buyers that may not be prepared to build right away. Usually, buyers get this loan and start the construction process in about a year or more, after they’ve got the planning process going.
Ben points out that building a home might not be the best option for some individuals. For those that are not prepared for unexpected circumstances that may arise, or those who are very attached to specific timelines. In fact, Ben ran into a few hiccups when building his own home, which slowed the process down. Even though he was prepared for these setbacks, it still took an extra dose of patience. In the end, the results will be worth it.
The Benefits of a Green Choice Loan
Oly Fed’s green choice loan can be a great choice for individuals looking to build energy efficient homes. The energy-efficient loan provides the benefit of allowing the monthly energy cost savings to be deducted from principal and interest payment, which allows them to qualify for a higher loan amount. It also offers reduced loan fees, while also having a positive impact on the local environment.
Home Equity Loans
There is another option, for those that already own their own home, but have been considering moving. Perhaps they feel that the home they live in doesn’t meet their needs. This is especially true if they like the neighborhood they live in, but find the structure of their home doesn’t fit their needs anymore. Oly Fed offers a home equity line of credit, (HELOC). By tapping into the value of their home, they could renovate and make their old home seem new again. This option gives them a line of credit they can draw from and pay down to make some of those improvements they have been wanting to make.
Customers that are looking to make upgrades to their home can also look at the green choice loan if those upgrades are energy efficient, new windows, solar power, or many other options. Good for the environment, and the pocket book, these green upgrades can be a win-win.
Ben encourages future home owners to get really involved in the process. “If you’ve ever had a vision of what your dream home could be,” he says, “building your own home would give you the opportunity to make your dream a reality.”
Whether you decide to build your own home, upgrade the home you live in now, or find the perfect home to purchase, Olympia Federal Savings can help with loan options to fit your needs. If you have questions, you can visit one of Oly Fed’s many convenient locations, call them at 360-754-3400, or contact them through the Olympia Federal Savings website.
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