Construction Loan Woes

So, in my first blog about building a house, I talked a little about the differences between home loans, land only loans, and construction loans.. and now I have experience with all three. Mind you, I'm definitely not an expert, so I'd recommend contacting a loan officer that is proficient in construction loans if that's what you're working towards.

With the conventional loan, it was a little stressful as we had a high deb-to-income ratio (DTI) back then. We were still paying off debt, and Graham was only working part-time at the group home for $10/hr. We recently had switched one of our credit card balances to a 0% APR, which then lowered our monthly payment, so then we qualified for the loan. That was a big relief.

The land-only loan was scary because we were completely out of our comfort zone. We had to contact the county about land planning, ask a geologist about soil tests, and learn about balloon payments on loans.. It was more work than we were expecting.

And then, we went through with the construction loan.. Honestly, if I could have done it all over again, I would've done the all-in-one construction loan, with the land rolled in with the construction costs. It would've been so much easier to do it all at once, and it would've saved us a few thousand dollars in closing costs. However, we weren't ready to sell our house last fall/winter, which was necessary for a good portion of the down payment on the loan. Plus, it would've been a crazy amount of work to get everything we needed for the construction loan.

So, here's the low-down on a construction loan. There are several terms you'll need to get familiar with: DTI, closing costs, and the loan-to-value (LTV). Your DTI is fairly simple: your average payments on debt compared to your average gross income. To be approved for a mortgage, the recommended DTI is usually at or below 42% (including rent/mortgage). Closing costs can be several thousands of dollars, depending on your lender. They usually include loan origination fees, appraisal, and all kinds of fees (title, county, escrow, etc).The LTV is a little more complicated for a construction loan. If you put zero percent down on a house, the LTV is 100%. Unless you do a specialty loan (such as the USDA loan that we did or a VA loan), many lenders won't do 100%.  Also, you have to pay Private Mortgage Insurance (PMI) if the loan is >80% LTV.. which can add $200+ per month to your mortgage.

The complicating factor with a construction loan is that some lenders allow you to only put 5% down on a construction loan.. which is great for people like us who have cash but don't have like $80K to put down on a construction loan. Many banks require 20-30% down on construction loans due to the higher risk of new construction. Anyways, we based our future mortgage payments on our home's estimated LTV after appraisal.. For example, if it cost ~$400K to build a home, and the appraised finished home value is $480K, the LTV would be 80% and we wouldn't have to pay PMI. What we didn't account for initially was the LTV on the construction loan (~90-95%).. so we have to pay PMI on the construction loan.. which initially increased our estimated DTI. So, we have to pay PMI on the construction loan while the home is being built. We can re-finance the loan after the home is finished so we won't have to pay PMI, based on the fact that our home will be appraised way higher than what we will have paid for it. This is definitely a bonus to a buyer's market.. as most homes in our area are being sold for $180-200 per sq foot.. so our home could potentially be worth $455-505K after it's built.. which is way more than what we will pay for it.

Going through this process has been anxiety-ridden, as we've felt like we didn't have good communication from our lender, and our questions weren't always answered in a timely fashion. We also had to get bids for all of the items not provided by our home builder, such as the outdoor concrete for patios and driveways, site development, septic design and install, utilities installation, electrician fees, permits, on-site portable toilet.. etc etc etc. It was quite the project, but I managed to do all of it fairly quickly. If you know me well, you'd know I hate making phone calls, so I hated every minute of talking to strangers about things I only have a vague knowledge about. I've never felt so stupid in my life asking an electrician about how we get temporary power to the house.

Due to the poor communication from our lender, we even contacted another loan officer in our area (Terry Pemberton of Umpqua Bank) to see if we could get a better deal basically. He was very knowledgeable and quick to respond, so I'd highly recommend him if you're building in Washington state. However, our current lender had the best product for us, so we stayed with them. We should be closing soon.. but right now we are waiting for the appraisal. I'm really quite curious as to how the appraisal will turn out, as it's just based on the plans, the HERS score (that's a discussion for another day), and the upgrades we're planning on putting into the home. Let's hope it comes out high!

Stay tuned for my next home building blog.. I'm planning on blogging about the design and pre-permitting process. Should be fascinating. I'm sure.

Update: Curious about our progress? Click on this link to see all of our home building updates, or check out my Instagram account.

Four Years Later..

Yes, this is a post about my personal life.. so if you're just following my blog for building our house with Lexar Homes, you'll just have to check back next week..

Anyways, over the past three years around this time of year, I tend to look back at my life and see how it's changed. It has nothing to do with the spring season, but with the fact that Graham and I separated on May 1st 2013. If you don't know about our saga, here's the starting point to our journey. Also, this year, Graham and I have now been together ten years.. so it's a particular year of significance for us.

Four years ago, we went through a personal hell. We separated for Graham's own good, for him to get help, and to fully change without me to push him. He needed to be away from his family to fully realize what he had was worth working to keep. Because of the lies he told about flunking out of school and the trust he broke with his lies, it has taken a lot of time and work to rebuild our relationship. Time has been the biggest help, as it's helped reduce the pain. As time has gone by, I've been able to look back with fondness and with a bittersweet outlook. I've learned a lot.. and grown up a lot throughout the years.

To be honest, it's hard to stay with someone after they've broken your trust. I don't mean to make light of other people's serious problems as well, but I'm pretty sure I have a mild case of PTSD from what I've gone through. Whenever I hear a trigger word, or a trigger situation, such as a mention of somebody who has lied to their spouse.. I have a mini panic attack. My heart starts racing.. I get the anxiety poops... I check the cell phone records.. and then I have to call Graham and make sure he's not lying to me about anything. It sucks, but I'm glad I can better understand my response. Plus, my mini panic attacks get better and less severe as the years go by..

It's not easy to be in the position to doubt your spouse. I've doubted Graham so many times about the things he says and the things he does.. For a while there, our relationship required a lot of verification of things he did. He checked in with me when he was at work. Our emails and account were open and available at any time to each other. I've definitely had my moment of complete freakouts where I needed a lot of comfort and reassurance. Mostly, I feel better now. When I hear my normal anxiety triggers, I react much better. I'm not still asking Graham about events like 8 years ago. I'm looking forward to our lives together, and experiencing what life has to offer as we grow older together.

And yet, still.. sometimes I feel a sense of impending doom because things are too good right now. Sometimes I feel like I'm waiting for the other shoe to drop.. or something else to go terribly wrong. I feel sometimes like I'm not meant to have a happy life. I know friends who have lost spouses at a young age, or be diagnosed with a terrible chronic disease. I've seen people lose young children. My own brother had a brain tumor at 8 years old and a stroke at 32. Life's not fair, and I know it.. but I often fear for the worst. When I got pregnant with Sadie within the first month of Graham returning from Virginia, I was convinced that I would miscarry. Then after I got through the first trimester, I was worried I'd lose her at a young age. I don't know if this is ongoing anxiety, or just plain motherhood that I'm dealing with.. but it's not fun to have all of these negative thoughts.

But really, married life after a breach of trust doesn't have to be all negative. Luckily for me, it was not infidelity, or else I might be singing a different tune. I'm able to have a happy marriage because I married a great man. An imperfect one, sure.. but who's perfect anyways? Graham treats me like I deserve. He never nags or picks at me. He is my absolute best friend. He is an amazing father. After working a 12-hour day, he comes home and immediately helps me in the kitchen or plays with the kid. He helps with the chores. He doesn't complain about my meal choices (although one time he told me that chips and salsa didn't count as dinner, and I almost kicked him out). He is handsome and looks great in a hat. He kisses me goodnight every night. I am freaking lucky to have a husband so caring and perfect for me in almost every way. What we have is worth fighting for.. and I'm so glad we keep working towards eternity together.

And seriously, how can your heart not melt when you see this every day..?

Choosing Design Features for our Lexar Home

Remember my list of wants/needs for our dream home with Lexar Homes?

Well, after that was taken care of, there were a couple of design features I wanted to add to the plan. These were all inspired by Pinterest, so I'll link to the original posts.

1) Makeup vanity. In our old home, I didn't have a place to sit in the bathroom to do my makeup. Standing for 20 minutes every morning wasn't an option, so I did my makeup on the dining room table or on the kitchen counter. It drove Graham crazy to have my makeup out on the kitchen counter every day.. So, our new home HAD to have a separate space for makeup with a spot to sit.

These were my inspiration:


Original image from Houzz. This one is way too elaborate for my taste, but I was trying to find a corner makeup vanity that I could sit at..

Unknown original source (googled "corner makeup vanity"). Our vanity will look very similar to this one.


2) Tile designs behind master bathroom vanity up to the ceiling. Subway tile is affordable, classic, and can have various layouts that make it look stylish and contemporary. I really love geometric patterns, so I want to contrast a geometric tile design with round vanity mirrors above the sinks. These are my inspiration.


Original link here


Unknown source. My favorite non-subway tile design, but this specific tile is wayyy too expensive for my taste.

3) Stone hearth behind wood burning stove. With a typical fireplace, you can be pretty basic or glamorous with the surround and mantle.. but with wood burning stoves, usually it's pretty simple. Wood burning stoves can be kind of ugly and just serve a function without style. I wanted to make it look more stylish by adding a stone background behind the wood burning stove on the wall up to the ceiling. The home won't be built with a mantle, but I'll have Graham DIY it later. These are my inspiration:


Original image from Houzz


Original source unknown.

4) Built-in kitchen desk and cookbook shelves. Once we found out that Lexar Homes couldn't do a custom cookbook shelf for me in the kitchen, and we re-worked the dining room layout, we decided to have Graham's brother design a custom kitchen desk and shelf section for us. It won't be built right away, so we'll probably get some cheap IKEA thing in the mean time, but we plan to put it in after the first few years. These are my inspiration:


Original link here


Original link here

5) Planked kitchen island. No, this isn't shiplap, nor do I consider it to be the "industrial farmhouse" style that is so hot right now. I'm not a country girl, and my husband is from inner city Portland (before it was gentrified). But, I do love the geometric lines from the planks, and I love that it'll protect the wall from people's feet when they sit at the counter. We plan to DIY this while the house is being built.


Original link here

6) Double barn door between our master bedroom and workout room. Although we plan to have the doors open for most of the time, we wanted a way to separate the rooms for privacy in case we have a lot of family staying at our house (which is definitely in our plans). We plan to DIY these from cheap-o hollow doors from ReStore. These are my inspiration:


Original link here


Original link here (Yeah, Graham said NO to anything intricate.. so it's a no-go on anything with a specific design).

Anyways, keep following my blog to see these plans come to life in my house, and to learn more about building your own home!

Update: Curious about our progress? Click on this link to see all of our home building updates, or check out my Instagram account.

Renting Sucks

Ok, so now I need to rant about renting. The only good thing about renting is that when there are problems with the house, you can call someone else to fix them without having to pay for them. That's the only good thing. Ugh. Wait, the bedrooms are bigger than our old house. Ok, so those are the only good things. Oh, and there's a gas fireplace. I promise.. that's it.

--The rent for this tiny place is only $100 less than our previous mortgage.
--The bathroom smells musty.
--The living room, dining room, and kitchen floor plan is tiny.
--I can only store 1/4 of my kitchen stuff in the kitchen.
--The oven/stove combo is older than me.
--I don't want to cook because of the awful state of the kitchen.
--The whole place is so small that if literally one thing is on the floor, it feels like the house is a disaster.
--For the love of all that is holy, pine needles are the worst for light-colored home floors. Vacuuming every few days is a must.

Anyways, we are adjusting to life in this temporary house. It is really odd living in place that I don't plan to be in long. We didn't hang up any pictures or wall art except for spots where there were already nails on the walls. The TV is balanced against the wall on top of our media center. 2/3 of my kitchen appliances and supplies are in the garage. The piano is in the garage. My life is on hold because I feel like I can't do all of normal things I do. I cannot wait for our new house to be built, and this renting experience will only make it more sweet when it's done!

Building a Semi-Custom Home with Lexar Homes

I promise, my blog will NOT only be about building our house.. but that's kind of the only thing we're doing right now. We don't get out much.

Before I get to go on about the joys about customizing our desired floor plan, I forgot to mention exactly how I did a feasibility study in my first blog. I said I gathered information, but I had to go through proper channels. Every county will have information about the land and lots within their boundaries. Pierce County has an interactive map that allows you to get the parcel number, tax info, etc. The website was helpful, because it tells you if your lot is within certain areas, such as a landslide risk, wetland boundaries, aquifer recharge area (not quite sure about that one, but it has something to do with groundwater supply), etc. This is important because if your land has wetlands, has a landslide risk, or is in a groundwater supply area, it can increase your cost to build or change the area in which you can build. Also, each assessment can cost upwards of $500+ (landslide risk assessment is like $700-1200). I was researching a lot that had some wetlands at the back of the property, which REALLY limited where you could put a house on the lot because the county required fencing 50-100 feet away from the wetland area. Word to the wise: do this research through your county prior to putting in an offer on the land so you don't get too excited if the lot has too many restrictions on it.

Now that that's done.. Let me tell you about the fun part: customizing our floor plan. Since we decided to build with Lexar of Tacoma, we (and I do mean I) narrowed it down between 3-5 various floor plans we liked. I compared the square footage, the base price of the home, and the pros/cons to every floor plan. We could have every thing we wanted in a floor plan, IF we wanted to spend $500K on a house and have a house over 3000 square feet. Yeah, not in our budget, and we definitely don't need a house that big. Lexar does allow you to customize your floor plan, but you do obviously have to get the changes approved by a structural engineer. So, I decided between 2 plans: the 2573 (to state the obvious, the house name is the square footage) with a slight modification to add a 3rd-car garage and slightly increase the size of the home behind the garage, or the 2057 with a custom plan of eliminating the shop in the garage, adding the 3rd car garage, and expanding the house behind the garage.

This is the 2573 (photos posted from Lexar's profile on Houzz.com):

By Lexar Homes Olympia - See more Home Design Photos

Photo by Lexar Homes - Search craftsman home design design ideas

This is the 2057:

By Lexar Homes Olympia - See more Home Design Photos

Photo by Lexar Homes - Search rustic exterior pictures

Like I said, both homes required some tweaking, and we ultimately decided on the 2057 plan to fully make it our own. I really like the general layout, the large kitchen (and you can't see dirty dishes in the sink when you open the front door!), the curved hallway to the back, and the covered porch in the backyard. Plus, when we added in the extra square feet, it was slightly less than the base price for the 2573. I also really liked the curb appeal and exterior of the 2057 plan the best.

So, I started doing drawings of what we wanted to modify on the 2057 plan. Mind you, I'm not an architect or even artistic. I simply drew a scaled drawing of the house and what I wanted it to look like. I got rid of the garage shop, added a 3rd car garage, and expanded the entire house behind it. I wanted to add a couple of things: playroom, exercise room, cut-out in the dining room for a desk and cookbook shelves, and a large closet in the playroom. I changed the layout of the master bedroom, master bath, and closet, so I had no idea how to configure the bathroom, the windows, etc.. so the drawing was pretty basic. So, we handed in my sketches and hoped for the best.

Unfortunately, due to my lack of expertise, and a lack of communication on their part, their floor plans and engineering calculations from my shoddy drawings went to engineering and drafting without us approving the final product. So, when we got the plans almost two months later, we were excited, but disappointed that the plans weren't complete from our perspective.

--They forgot the dining room cut-out for my shelves and desk.
--There were no additional windows in the huge master bedroom or one single window in the master bathroom.
--They forgot the man-door out the garage.
--The pantry was small.
--The workout room was ginormous and just as big as the master bedroom.

We also wanted a couple more changes:
--More lights in bigger bedrooms.
--Expand the dining room out to be flush with the master bedroom.
--Add the cut-out in the dining room for a future built-in desk and cookbook shelves.
--Get rid of the wall to the hallway so we can see into the playroom and hallway and open up the space.
--Add sliding door to back porch.

So, this is what the layout ended up looking like (not sharing the original plans from Lexar for potential copyright issues):

As you can see, I even have furniture picked out for my home.  :)

Anyways, our plans are currently in their second round of drafting, and should be approved soon through Engineering. Once those are through, we will contact our septic and site plan designer to get things moving so we can start the permitting process!

Next installment on the blog: picking design features for our home.

Update: Curious about our progress? Click on this link to see all of our home building updates, or check out my Instagram account.