Hard Money Budget Letter
I just recieved my welcome letter and budget letter from UMTH lending and am a little confused.
It reads:
Loan amount $75,030.00
Hold Back $27,000.00
Initial Draw $48,000.00 (property price is $46K)
Cabinets $10,000.00
Paint interior and exterior $1,500.00
Plumbing and electrical fixtures $5,000.00
Range/oven/venthood/cook top/
dishwasher/disposal $1,500.00
Sheetrock/tape texture $7,500.00
Misc $1,500.00
Totals $27,000.00
Please review the amounts carefully and be aware that only the amounts shown above will be available for you to draw as you progress through your planned repairs.
I have carefully reviewed the proposed repair budget above and agree that all figures are fair and accurate. I further agree that I understand that additional repairs not shown above will not be funded from this loan and i understand that all available funds are itemized above.
My question is this: I am putting an addition on the house and it was included in the square footage on my appraisal as well as all my repair estimates. The end number comes out to exactly what i calculated but i am confused on the draws. Do i need to have cabinets installed before i can take the draw of $10k? My contractor is gonna need to get paid after the addition is enclosed. I have sent an email to the lender asking them the same questions but wondered if someone could shed some light on the draw process.
Thanks in advance for any help.
Invest Well requires repair information to be completely identified in the Investor Loan Request to determine the amount you need. As you make improvements to your property, you may request the release of your draw money by submitting the Draw Request
Go to their web site for more information at: http://www.investwell.com
[addsig]
I'm not an expert but in my experience with a construction loan I had to complete the work and then submit the bill from the contractor to get paid. The cost breakdown they gave you is what you are allotted for each job. This is not cut in stone but should be accurate when planning the finish quality for the job.
Thank you for the replies. I just spoke to them and they said that the appraiser had a few things messed up and had sent it back to them several times. So rather than sending it again they just set the cap at there $27K repair estimate wich matched mine also. They are not going to make me wait to put cabinets in to take a draw on the addition. So far it has been a pretty painless process dealing with investwell.
I have never done this type of loan and probably making things more complicated than they need be.
Again thanks for the input
Ron
Totally unreleated to your question but $10,000 for cabinets in a house you bought for less than $50,000? What's wrong with that number?
Rehabinator that was my point. The appraiser has redone the numbers about 6 times for the repair sheet. Investwell finally said forget it lets just go with the end number since my end number and the appraisers end number were pretty much the same. (within $800). My concern was that $10k in cabinets is about 9 times more then my budget, and there is no mention of the 2nd floor addition. How was i to get draws? Even though they are assuring me that my draws will not get hung up (she said she spoke with the girl that releases the draws and flagged the account to let draws go based on the amount of work completed) I am still a bit concerned. I guess if i can get through this one I can get through anything.
Just curious how things have gone with UMTH?
Any comments, good or bad?
-WG
[ Edited by writergig on Date 01/06/2005 ]
I close Monday late afternoon. So far so good. They actually have been really good so far to deal with and pretty easy also. I will let you know as we go through the project.
How long did it take to get the initial draw to purchase the house?
I'm thinking of getting HML, and just want to know how many days they take to fund after I apply and submit my paperwork.