An Example
The Melrose located in
Gypsum, Colorado.
The Smiths, a working couple with 2 children, apply for our program and are pre-qualified for a loan with a budget of up to $160,000. Based on their affordability and housing preferences, they choose to build a 3 bedroom ranch-style home.
They then find a perfect lot in their favorite neighborhood for $30,000 that meets their budget (they put $1,500 toward the purchase of the land and the remaining 95% is financed through their construction loan). With our guidance, they then solicit bids from local sub-contractors who will complete each phase of construction. The Smith's decide to paint and insulate the home themselves to reduce costs. Here is how the program worked for them:
| Appraised value of their finished home: | $ | 200,000 | |
| Total Cost to Build: | |||
| Land Purchase: | $ | 28,500 | |
| Home Package: | $ | 65,000 | |
| Subcontractor Labor: | $ | 56,500 | |
| Finance Charges | $ | 10,000 | |
| Total Construction Loan Amount: | $ | 160,000 | |
| The Smith's Equity: | $ | 40,000 |
As you can see in this example, the Smith's finished home is worth $200,000 and they needed to obtain a $160,000 permanent mortgage to repay their construction loan. The Smith's $40,000 equity position, which equaled 20% of the $200,000 appraised value of the home, enabled them to obtain a mortgage without a big down payment.*
* The example used is for illustrative purposes and represents the average experience of our customers. Each individual circumstance is unique and actual results will vary.
