Dream Homes Blog 4-23-13 – Rebuilding after Sandy?
Show Me The Money! 7 Ways to Fund
Great Tips on Saving with Do-It-Yourself Options, an
Exciting New Loan Program & Tips for Staying Sane
Greetings NJ –
Hopefully this post finds you doing well and enjoying the beautiful spring weather.
Today we’re talking about something near and dear to everyone’s heart – money. This topic is especially important if you are trying to figure out how to fund the rebuilding of your home, assuming that your insurance won’t cover the entire cost.
First, thanks to everyone who attended the FREE Rebuilding after Sandy Seminar last Thursday at Kate & Ally’s Restaurant in Forked River. We heard some great information from Scott Lepley, Tracey Giery, Sandra Guage, and Steve Brasslett. There was a lot of good material exchanged and everyone walked away a little bit clearer about the confusing Sandy issues. Special thanks to Steve Brasslett from Ivy First Bank for an innovative new financing product, which we will talk more about today.
Our next seminar will be in mid June at the Ocean County Library in Toms River. In the meantime, Tracy Giery will be hosting a Wine & Cheese Rebuilding Seminar at her home in Little Egg Harbor on one of the 2 Thursdays prior to Memorial Day. ( A good idea – the wine thing. Takes some of the edge off the subject matter…) Let me know if you would like to speak or attend either event, or both.
Ok, let’s talk about money, and specifically about bridging the gap between the money you will or have received from insurance and the total amount you need to rebuild. This amount is generally between $30,000 – $60,000. There are basically 7 ways to fund your reconstruction.
- Homeowner’s insurance
- Flood insurance
- ICC (Increased cost of compliance)
- Refinance or home equity line of credit
- FHA 203k Program
- Do some of the work yourself to save money
- SBA (Small Business Administration) Loan
Each option has positive and negative aspects. Savings and home equity lines of credit are the quickest, easiest option to bridge the gap between insurance money received and the total cost of the development. Neither requires refinancing your existing mortgage. The $30,000 ICC money is what you are entitled to under a rider in your flood insurance policy if you choose to bring your house into compliance with the new codes. Refinancing your existing mortgage under a construction loan, working with a FHA 203k loan, or getting an SBA loan for the reconstruction are all effective solutions, but involve a large amount of paperwork and diligence to accomplish. Most people are using a combination of the above solutions.
A new idea, which is a very creative twist on the home equity line concept, is a solution which comes courtesy of Steve Brasslett from Ivy First Bank. Seeing how all the existing solutions were coming up short in some way, Steve created a hybrid program with a fixed total fee of only $90, which is structured like a home equity line, but where money is released as work is completed, like a 203k or construction loan. The difference is the relatively modest fee of $90 as opposed to thousands of dollars for the other two programs, and the fact that you can leave your existing debt in place and don’t have to refinance.
The best part is a 1.9% rate for 12 months and then a conversion to a 20 year note at the prime rate plus .5% (currently that would be a 3.5% mortgage).
It’s a great program which will definitely help a lot of people. Once again Steve has come up with an innovative financing solution which directly addresses current needs. Give him a call at 609 383 3900 or email at firstname.lastname@example.org for a consultation. I’ve already referred 2 of our current clients to him and both will be utilizing the new program. Great job Steve!
An old-fashioned idea which we should all consider polishing off and using again…sweat equity. Sometimes you can just spend less money, and do some of the lighter work on your house yourself. Painting, removal of old cabinets, sheetrock, insulation, light mold remediation, trim and replacing fixtures can often easily be done by you on nights and weekends, saving you considerable money. More importantly, doing some of the interior work yourself lets you focus your contractors attention to the relatively more important matters of elevating your home.
Finally, in the category of keeping sane (or returning to sanity) while this is all happening and you are wondering what to do, I have a back-to-reality thought which may help. It’s as follows: If you find yourself stressed out your eyeballs, losing sleep, beating or berating your pet (or your spouse), and cursing the universe, remember: you don’t have to do anything right now.
That’s right. There are times in life that immediate, emergency action and rapid decisions are vitally necessary. This is not one of those times. Though you definitely need to be proactive to address the elevation of your home (since the underlying issue is not going away), you do not need to rush into that decision. A delay of a week, a month, or even several months will not matter in the scheme of things and may help you deal with the entire process in a way that doesn’t take years off your life. Sometimes you need to give yourself a break, take a deep breath, think through your options and let the correct choice for you bubble up to the surface. It will definitely happen and you will sleep better and be more at peace with your decision. While there is a need on a macro level for all of us to work steadily towards rebuilding, there is no need for any individual person to inflict high stress and pressure on themselves on a moment to moment basis. Nothing is worth that level of self imposed grief.
I hope my post helps you today.
On another note, we actively purchase raw land, building lots and existing properties and have done so for many years. If you have property to sell, give me a call and let us evaluate it for you.
Stay well NJ.
Rebuild, Renovate, Raise or Repair Your Home from Storm Sandy
Rebuilding NJ One Home at a Time…
Residential Construction & Development for over 20 years in NJ
314 Rt.9, Forked River, NJ 08731 Mailing: PO Box 627, Forked River, NJ 08731
609 693 8881 x 102 Fax: 609 693 3802 Cell: 732 300 5619