Ok, so maybe not a horror show but pretty freaking frustrating. It has only become funny now that I am done and writing about it. When I was on the phone with banks.... not so funny.
I read about other peoples experiences trying to get money to build their unusual houses. Horror stories of people building "green" homes like the straw bale and sand bag earthship homes using just multiple credit cards as a way to borrow money. Why did they do it? Because banks wouldn't touch them with a 10 foot pole. They kept spread sheets and were constantly playing a shell game of moving debt around to reduce their interest rates, not ruin their credit and still manage to build their unusual homes. This was something we were absolutely NOT going to do. Then again, we are also using an established construction company (building since the early 1960's) and not just stacking found materials ourselves to make an earthship house. Honestly though.... its a good thing Mr. Dometastic has a full time job because using found materials and gluing them together into a house would be right up his alley. I dodged that bullet! If he had the time, we would be stacking old tires, bottles and sandbags.
I was warned that finding a building loan/mortgage for a round house would be difficult but it is still frustrating to dead end with almost every call. I do have a few funny experiences from all the calls I made.
One lady gave me data on a "safest place to live" study. I made the mistake of telling her these domes are used as disaster shelters. Turns out my area of CT is the safest place to live in the USA according to one study. She used this to try to convince me to change our plans on building our house to something more "normal" so she could give me a loan. Oh Surrrre, we'll just throw out all our plans from the last 10 years because some random loan officer at a bank tells us that there is no need to build the house we want. I of course had to google this "study" and it turns out there are many studies and none of them agree. The one I think she was referencing is Slate's "America's Best Place to Avoid Death Due to Natural Disaster". Personally I think building a virtually disaster proof house in the "best place to avoid death" sounds pretty freakin win win to me.
Then there was the conversation where I wished I had that iPhone classic cricket chirp ring tone all cued up. The lady was so excited to find out what kind of unusual "custom home" we wanted to build that she couldn't wait for me to answer. Instead she just started blurting out guesses.... Post and Beam anyone? When I told her Monolithic dome, there was that cricket worthy awkward silence again.
After way too many awkward conversations, I decided the "custom home" lingo was best for the initial email to find out if they even offer construction loans but the phone conversations needed to be a little more up front. It was best if I told them right away that comps would be a problem and ask if they would still be willing to work with us. I did get more than a few flat out answers of no. But I did also find one local bank that said yes assuming our credit was good. I had found a local bank that was willing to give us the loan and hold onto it themselves. Turns out this is the key and clearly not the norm.
Most of today's banks don't hold on to the loans and mortgages that they write. Instead they bundle them together with a bunch of others and sell them to big nationwide companies. Its a bit like Costco but the bank version. Better rates for cookie cutter mortgages sold in bulk. They also need similarly constructed houses that have sold in your build area within 6 months to verify how much their investment is worth on the open market. HA! Fat chance with our house since it will be the only one in our state.
If you have a mortgage, maybe you have experienced the mortgage swap. You get a letter telling you that your mortgage was sold to (insert company 3000 miles away). You don't think much of it and just pay your bills to the new company. This is your current mortgage holder doing the Costco thing. They get less money selling it than if they kept it and collected from you for 30 yrs BUT they also dump the risk by selling. The other company gets a good deal and hopes that high volume makes up for taking the risk. Its all a numbers game.
So the big take away from this experience is you need to find a small local bank that will keep the mortgage and is willing to be flexible about the lack of comps. Sounds simple but based on my calling experience...it is pretty hard to find. The banks are in it to make money after all.
I read about other peoples experiences trying to get money to build their unusual houses. Horror stories of people building "green" homes like the straw bale and sand bag earthship homes using just multiple credit cards as a way to borrow money. Why did they do it? Because banks wouldn't touch them with a 10 foot pole. They kept spread sheets and were constantly playing a shell game of moving debt around to reduce their interest rates, not ruin their credit and still manage to build their unusual homes. This was something we were absolutely NOT going to do. Then again, we are also using an established construction company (building since the early 1960's) and not just stacking found materials ourselves to make an earthship house. Honestly though.... its a good thing Mr. Dometastic has a full time job because using found materials and gluing them together into a house would be right up his alley. I dodged that bullet! If he had the time, we would be stacking old tires, bottles and sandbags.
I was warned that finding a building loan/mortgage for a round house would be difficult but it is still frustrating to dead end with almost every call. I do have a few funny experiences from all the calls I made.
One lady gave me data on a "safest place to live" study. I made the mistake of telling her these domes are used as disaster shelters. Turns out my area of CT is the safest place to live in the USA according to one study. She used this to try to convince me to change our plans on building our house to something more "normal" so she could give me a loan. Oh Surrrre, we'll just throw out all our plans from the last 10 years because some random loan officer at a bank tells us that there is no need to build the house we want. I of course had to google this "study" and it turns out there are many studies and none of them agree. The one I think she was referencing is Slate's "America's Best Place to Avoid Death Due to Natural Disaster". Personally I think building a virtually disaster proof house in the "best place to avoid death" sounds pretty freakin win win to me.
Apparently cold weather doesn't kill many people.... in fact, it is just the opposite. The age old question of who actually wins is REVEALED!
Then there was the conversation where I wished I had that iPhone classic cricket chirp ring tone all cued up. The lady was so excited to find out what kind of unusual "custom home" we wanted to build that she couldn't wait for me to answer. Instead she just started blurting out guesses.... Post and Beam anyone? When I told her Monolithic dome, there was that cricket worthy awkward silence again.
After way too many awkward conversations, I decided the "custom home" lingo was best for the initial email to find out if they even offer construction loans but the phone conversations needed to be a little more up front. It was best if I told them right away that comps would be a problem and ask if they would still be willing to work with us. I did get more than a few flat out answers of no. But I did also find one local bank that said yes assuming our credit was good. I had found a local bank that was willing to give us the loan and hold onto it themselves. Turns out this is the key and clearly not the norm.
Most of today's banks don't hold on to the loans and mortgages that they write. Instead they bundle them together with a bunch of others and sell them to big nationwide companies. Its a bit like Costco but the bank version. Better rates for cookie cutter mortgages sold in bulk. They also need similarly constructed houses that have sold in your build area within 6 months to verify how much their investment is worth on the open market. HA! Fat chance with our house since it will be the only one in our state.
If you have a mortgage, maybe you have experienced the mortgage swap. You get a letter telling you that your mortgage was sold to (insert company 3000 miles away). You don't think much of it and just pay your bills to the new company. This is your current mortgage holder doing the Costco thing. They get less money selling it than if they kept it and collected from you for 30 yrs BUT they also dump the risk by selling. The other company gets a good deal and hopes that high volume makes up for taking the risk. Its all a numbers game.
So the big take away from this experience is you need to find a small local bank that will keep the mortgage and is willing to be flexible about the lack of comps. Sounds simple but based on my calling experience...it is pretty hard to find. The banks are in it to make money after all.
Comments
Post a Comment