Cohousing-L Mailing List: Re: Evaluating construction loans (using actual numbers)

[Fred H. Olson (fholson]

John at Heartbeat Cities  jc.hbc [at] worldnet.att.net
is the author of the message below but due to a problem it was posted
by the Fred the list manager:  fholson@cohousing org

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Odysseus.....My name is John. I am the financial guy at Heartbeat Cities (16
years of banking experience). Mark Knight forwarded your message to me.
Regarding your offer, I would have to agree with your financial consultant.
9% is the current "prime rate" for banks. Usually they will add a
"spread"(i.e. additional interest) to the prime rate (up to 2%). In
addition, most banks will not "fix" the rate for construction financing (a
benefit to you in a rising rate environment). Regarding your down payment,
20%-30% is average, so I'd say 23% is fair. Also, you will pay less interest
expense by putting more down during construction. If I can assist in any
way, let me know....Sincerely,  JC at Heartbeat Cities
(www.heartbeatcities.com)