General Questions and Answers
|What type of work do we do?
|| Residential remodeling of kitchens, bathrooms, family rooms,
finished basements. Construction of room additions, decks and new homes. Concrete driveways, roofing and siding. Installation of windows and doors. Painting, staining and flooring. Brick mailboxes, fireplaces and steps.
|Approximate start and completion dates for your project.
|| Projects are scheduled on a first-come-first-serve basis. When
we receive a signed estimate/contract, we will call you regarding a start date and provide you with the approximate time frame we believe the project will take. To the best of our ability we try to maintain our schedule, but on some occasions, due to weather or unavailability of materials, we may need to deviate from the original date.
|Do we provide references?
|| Of course! We have several references within your area that
provide you with the most accurate display of our quality craftsmanship. Because we have relied on word-of-mouth advertising since 1995, our success undoubtedly lies in the satisfaction of our customers.
|Do we offer a discount?
|| Because our prices are not raised to cover extra hidden costs, there is no room to offer discounts; we do not believe in making the customer haggle for the best price. Quality materials, fine craftsmanship and customer service is the foundation for your estimate.
|Do we offer a warranty?
|| The products we use carry warranties, such as Andersen® windows, Moen® faucets, and Kohler® toilets, they are warranted to be free from defects in manufacturing, materials and workmanship.
|Are we licensed, bonded and insured?
|Do we use subcontractors?
|| Yes, in some instances. Any subcontractor that works on your
job has been with us for many years. There is constant communication and meetings between the subcontractor and Caliber Construction, Inc. Ron personally inspects all workmanship that occurs on the jobsite.
|What form of payment do we accept?
|| We proudly accept Cash, Check, Visa and MasterCard.
|How does the Energy Tax Credit work?
|| The lifetime maximum amount is $ 500.00 per tax payer, per
dwelling. It's a 10% credit on any energy efficient improvements, but some items have limits (for example: if you install exterior windows the maximum is $ 200.00). Contact your accountant for future information or look on the IRS website.
|What about customer privacy ?
- We do not sell customer information.
- We do not provide customer information to persons or organizations that are doing business on our behalf, for their own marketing purposes.
- We afford prospective and former customers the same protections as existing customers with respect to the use of personal information.
Information we may collect
We collect and use information we believe is necessary to administer our business, to advise you about our products and services, and to provide you with customer service. We may collect and maintain several types of customer information needed for these purposes, such as those below.
Types of information we may collect and how we collect it:
- From you, Your address, telephone number, credit card number with expiration date and house alarm code.
- From consumer reporting agencies, such as your credit history.
Is Caliber Construction, Inc. a lead
paint certified firm ?
Yes, we have completed the training and are a lead-safe certified company by the EPA.
On April 22, 2010, the Environmental Protection Agency (EPA) enforced a new law that requires all contractors have proper certification for dealing with lead on homes built prior to 1978. The law states, that all contractors "performing renovation, repair or painting projects that disturb lead based paint...to be certified and to follow specific work practices to prevent lead contamination."
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|New Construction Questions and Answers
This compilation was designed to answer the most frequently asked questions
concerning the residential construction process and lending institutions.
Although we have written this as accurately as possible, procedures may vary
from time to time and per financial institution.
Thank you once again for considering Caliber Construction, Inc. for your new
home builder. “We appreciate your commitment to Quality”.
|What is a construction loan?
|| A construction loan is a loan made to either a builder or an individual to facilitate construction of a home.
|How does a construction loan differ from a mortgage loan?
|| Both loans are actually mortgage loans. The term “mortgage” applies to a loan on real estate. The primary difference in terms of lending is that the term “mortgage loan” most often is used in connection with an existing dwelling. A “construction” loan is made with the expectation that a dwelling will be built on a lot.
|What is a construction-permanent loan?
|| A residential construction loan typically with a maximum loan value ratio of 80% Of the appraised value that is determined by an independent fee appraiser chosen by the bank. The appraised value represents a combined value of building lot plus dwelling. “Construction-permanent” means that the rate and term are set at time of application and carry through to completion of the dwelling and then on to the permanent mortgage.
|How long is the construction loan period?
|| Usually a construction loan period is six months. In the majority of cases, this is sufficient time to build a house in our area. If a longer term is needed due to extenuating circumstances this should be discussed with the loan officer at time of application.
|Do I need a builder?
|| Most financial institutions require the use of a licensed, bonded general contractor. Further, as a safeguard, if a builder has not worked with the Bank in the past, the builder is required to complete a reference form and submit financial data prior to the borrower’s application.
|Do I have to own a lot before I get a construction loan? Can I use my lot as equity?
|| The building lot must be titled to the borrower before a construction loan can be filed. Also, the Bank’s construction loan must be the first and best lien on the property. The building lot can be used to meet the Bank’s equity requirement, typically 20%. In some cases, depending on value of lot and cost of dwelling, a borrower may be able to borrow a portion of the lot cost and include it in the construction loan. This should be discussed with your loan officer prior to time of application.
|How do I apply for a construction loan?
|| The construction loan application in most respects mirrors the application for a loan on an existing dwelling, with one important exception. Since no house exists at the time of application, the builder must provide a set of detailed blueprints (plans). The loan is based on appraised value of the building lot plus the home to be constructed.
| What should I bring at time of application?
- Detailed and accurate building plans
- Specification list
- Builder’s cost breakdown
- Executed building contract
- Copy of deed and title policy (if lot is titled to borrower)
- Copy of lot purchase agreement (if borrower is purchasing lot in conjunction with the construction loan)
- Map or drawing of lot location
- Personal information and employment history
- 2 years complete Federal Income Tax returns for all borrowers; if self-employed, year-to-date profit-and-loss statement, financial statements and 2-years Federal Income Tax returns for partnership/corporation.
- Current pay stubs.
- Employment history for past two years, including name and address of
current and past employers.
- Current rate of base earnings and average of overtime, commissions,
- If you choose to include income for child support and/or alimony, provide documentation evidencing receipt of said income for the past six month period along with a copy of recorded Separation Agreement and Divorce Decree.
- Other income (i.e. social security, pension, rental, stock,
interest, dividends, etc.) requires documentation evidencing receipt as constant income.
- Information regarding assets
- List of depositories, including names, address, account numbers and
- Copy of most recent statement for mutual fund and brokerage accounts,
including retirement accounts.
- Documentation for any other source of funds to be used as down payment and
/or closing costs (i.e. gift letters, saving bonds)
- Information regarding obligations
- Name and address of all creditors, account number, balance, and monthly
- Non-refundable application fee
| How are applicants qualified for a construction loan?
|| Qualifying for a construction loan is done on the same basis as any other mortgage loan applications. For more information, ask your loan officer for a copy of the Bank’s Residential Mortgage Underwriting Standards.
|How long does it take to find out if our loan has been approved, and what
It normally takes about 7-10 working days after application to learn if the loan had been approved. Assuming a loan is approved, the next step is the issuance of a Commitment Letter. Upon receipt, the borrower is required to execute and return the lender copy of the Commitment Letter, which serves as a formal acceptance of the loan terms and conditions offered by the Bank. In most cases, a 1% non-refundable commitment fee (1% of the amount borrowed) must be forwarded to the Bank within 7 days of the loan approval. If the loan is made, this fee is applied against the closing costs. Upon approval of the loan, the Bank will also order all necessary title work required in connection with the loan.
When the Commitment Letter is received, the borrower is asked to contact his or her loan officer for an appointment to sign the final documents, which include Note, Mortgage Deed, Construction Loan Agreement, etc. Any funds needed to purchase the lot, close the deal, meet full contract price, or pay closing costs should be deposited with the Bank at time of signing.
After all papers have been executed, all documents, which must be filed of record with the County Recorder, are forwarded to the Title Company. The title companies work directly with the Bank’s Escrow Department in transferring of title, filing of the mortgage and disbursing funds for payment of title charges, lot purchase price, etc.
Once the transaction has been filed, or “closed”, a mechanics lien survey (also known as the “first picture”) is taken by the Survey Company. After this picture is taken, work can begin on the dwelling.
|Who pays the insurance during construction?
|| In most cases, insurance is the responsibility of the homeowner. The builder will, of course carry workmen’s compensation and liability coverage. The borrower normally pays the actual insuring of the property. We recommend that a Builders’ Risk Policy or Homeowners’ Policy with theft coverage (for building materials left on the lot and not actually attached to the dwelling) be obtained. The Bank will require evidence of insurance prior to disbursing construction loan funds.
|How does my builder get money?
Prior to disbursement of funds, the foundation must be installed and the Survey Company must take a foundation check (or “second picture”). The purpose of this picture and survey is to make certain that placement of the foundation complies with all applicable building and lot line requirements.
Usually, the bank pays all bills in connection with the construction loan. The builder is not paid on a “draw” basis. Bills are paid based on a percentage of completion as determined by an independent inspector chosen by the Bank.
Most Banks will require properly completed, executed, and notarized Affidavit of General Contractor must accompany each request for payment. This Affidavit will list the payee and be accompanied by the invoice. Payment will be made directly to the supplier and/or subcontractor, and will be mailed by the Bank to the payee. This Affidavit is to be signed by the General Contractor. Payment to the General Contractor for work done directly by him should be invoiced as for any other payee.
Prior to payment of any invoices, may require approval by the borrower, evidenced by his/her signature on the face of the invoice. The borrower may prefer to make arrangements with the builder authorizing only a builder signature on invoices to be paid. A signed agreement would be required for the Banks loan file.
Inspections from the Bank will begin upon written notification that the foundation is in and will continue throughout construction.
|When do my payments start?
During construction, interest is billed monthly based on funds disbursed from the loan. Borrower-contributed funds are generally used first, since no interest is owed on these funds. Once a month a billing is prepared.
Upon completion of the property, the loan is transferred to a permanent status and regular monthly payments, as specified in the Note, begin.
|When construction is done, how do I get my loan transferred to permanent
Upon completion of construction, the loan is automatically transferred to a permanent status. This arrangement can be made by calling the loan officer in advance of the expected completion date and reviewing the Bank’s requirements at that time. Generally, the Bank will require:
- A copy of the occupancy permit
- Final Affidavit of General Contractor
- Written instructions regarding disbursement of any remaining
- Final inspection report (ordered by the Bank)
|Can I pay my real estate taxes and insurance with my loan payments?
|| Generally, the Bank does not escrow funds for payment of real estate taxes and insurance in a construction loan. These are paid directly by the borrower. Once a full tax bill (land and dwelling) has been received, you may make arrangements directly with the loan officer for escrow of funds if so desired.
Disclaimer: The information on this page is not intended as professional or legal advice; you should consult a tax professional, financial advisor or legal specialist with specific questions. As a matter of policy, Caliber Construction, Inc. does not endorse any product, service or business. This page is provided solely to assist you in exercising your own best judgment and the information is believed reliable, but not guaranteed as to accuracy.
Edited by Candice Gutzman
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