Bellwether's Blog on life and money
Many new home developers recognize that more and more home buyers want custom layouts and features in the houses they're building. When you work with a housing developer that is developing a parcel of land and building a number of homes on it, there are limits to how far you can customize your home (and sometimes specific requirements you have to adhere to.)
But we know there's a group of intrepid individualists—you!—who want to design and plan every aspect of your very own dream home. When you hire a contractor to build a specific custom home for you, the options are endless. As a financial institution that can dream as big as you, Bellwether can help you learn the steps of working with a contractor to build your own home. We want to ensure this exciting adventure is as smooth as possible.
Steps to building your dream home
- Select a contractor - There are three ways to find a great contractor. One is from friends or family members who have worked with one. Another is your real estate agent who may be helping you find the perfect lot. The last one is from your Bellwether Mortgage representative who will help you with your construction loan.
- Review and select a home plan - Do some research online about the kind of home you like—with or without a basement, the number of bedrooms you need—and show samples to your contractor. Your contractor can steer you in the right direction for home plans and blueprints.
- Determine your budget - Different things, such as the pitch of your roof, the number of bathrooms, the kind of molding you want, all affect the overall cost of your custom home. Your contractor can give you a very rough idea of what to expect, but only when you nail down the specifics can he send out requests for proposal and get some definite costs for you.
- Secure financing - A custom home you build with a contractor will likely require a construction loan. At Bellwether we work side by side with you to plan and secure your financing so every phase of your build is hassle-free. See below to learn how a construction loan differs from the more common residential home loan.
- Begin construction - Your contractor will hire and manage all of the trades needed to build your home, from excavating and pouring foundation to the final finishes such as installing light fixtures and sodding your lawn.
- Consult regularly with your contractor - Make sure you're on the same page with regard to when decisions need to be made on things like paint color, finishings, fixtures, tile and other materials. If decisions are made in a timely manner (in advance whenever possible) then the building schedule will stay on track, which is a requirement of your financing.
Construction loan vs. standard home loan
The primary difference between a construction loan and a standard residential mortgage loan is that with a construction loan we are advancing money on a house that doesn't exist yet. We have to obtain an estimate of the value of the finished home, and then weigh risks due to changes in plans and schedule, which could impact the costs and the final value. To mitigate this risk, we normally review construction loans much more carefully and schedule periodic inspections of the project.
A standard residential loan pays all the funds up front, with a monthly payment set up for the buyer (you) to repay the loan over a long-term schedule. Construction loans, on the other hand, are somewhat different.
New construction loans can be described as "a reimbursement process.*" Land is selected, plans are drafted, and the loan is reviewed and approved by the lender. The construction project is scheduled and as work is completed, the homeowner submits a "draw request" along with documentation to prove completion. The lender has a third party inspect the work and then issues a reimbursement payment for the completed construction for that time period. The buyer typically makes interest-only payments during the construction phase, and once the home is completed the builder will either convert the construction loan to a traditional mortgage or the owners will need to refinance.
Tips to getting a construction loan approved
Here are some tips to make the critical step of your construction loan application with Bellwether as strong as possible.
- Get a thorough understanding—and all the forms required—of your financial institution's requirements for a construction loan.
- Consult with local realtors as well as the city to get an accurate assessment of the value of your property, and homes similar to what you want to build.
- Investigate and find a builder or contractor you're comfortable with. Make sure you like his or her work, and that he or she is reputable. Your financial institution may even be able to recommend some.
- Obtain blueprints of the home you want to build, and work with your builder or contractor to create an accurate estimate of costs and schedule of completion.
- Work closely with your financial institution as you prepare your documentation. The closer you work with them, the better they will get to know you and understand your project. This could add efficiencies to the decision process.
Getting a new construction loan can be confusing, but Bellwether can help. Do your homework on market value, construction costs, and what your income will allow, then give us a call.
If you're in the market for your first or your next vehicle, deciding between new and used can be a tricky choice. There's something reassuring about a brand new vehicle that has never been driven by anyone else, with everything from upholstery to engine in its optimal condition. However, new vehicles can be pricey. Used vehicles are much more affordable, but you're also purchasing a vehicle that has been driven by somebody else—and possibly driven harshly, with future pricey repairs lying in wait.
Before you start running some numbers in a car loan calculator, here are a few things to consider when looking at a new vehicle vs. a used one:
- New cars take advantage of the latest technology (eg. rear back-up cameras or hybrid fuel options.)
- New cars come with warranties—you'll be worry-free from major repair bills for the first two or three years.
- New cars sometimes qualify for better financing options such as a lower interest rate or a cash-back offer.
- Bellwether offers the same rate for new or used cars.
- Your budget allows for a new car.
Reasons to buy used
- Used cars are generally cheaper than their new counterparts.
- Used cars sometimes can have remaining warranty transferred to the second owner.
- Used cars sometimes (depending on the age and type of engine or features) can be cheaper to maintain or repair.
- Used cars often are cheaper to insure.
Narrowing your vehicle search
Before you start your vehicle search research, you'll need to track your research. You can create your own spreadsheet, or download this one as a starting point:
Then you can dig into the research:
- Check out the websites of the major manufacturers—Chrysler, Ford, General Motors, Honda, Kia, Mazda, Toyota, Volkswagen, etc.—and note which models fit the kind of vehicle and features you're looking for. Add them to your spreadsheet.
- Research the models you're interested in on the Internet. For example, which ones cost more to repair, or seem to need more repairs? (Some imports cost more for parts than domestically-manufactured vehicles.)
- Fill in each column for each model on your spreadsheet.
Buying the best new or used vehicle
Once you know the kind of vehicle that best suits your needs and budget, you can begin your search for your vehicle. You can search a new or used car dealer's website to see what they have in stock (phone and ask, if you don't see it online—not all dealers list all their used inventory online,) and then visit their showroom to get a real feel for the vehicle and how it drives. What does it cost? What warranty (if any) comes with the vehicle? Note everything in your spreadsheet, including your impression of how the test drive felt, how your passenger(s) felt (it's always a good idea to bring along a friend for a second opinion,) and how the interior features were to operate.
TIP: If you let the dealer know you're a Bellwether Community Credit Union member, you may be able to get your Bellwether loan right at the dealership!
If you're looking to buy a used vehicle privately, search your local printed or online newspaper classifieds, or selling sites such Craigslist. Arrange to view and test drive the vehicles that fit your needs and budget. Ask questions, such as how up-to-date the regular maintenance record is, and if it's been in any serious accidents. Make note of the VIN or serial number so you can check it later on a website such as Carfax, AutoCheck or the free VINCheck from the National Insurance Crime Bureau.
Help and car loan financing from Bellwether
Whether you've decided on which works better for you—a new vehicle or a used one—Bellwether has options to help you with the financing, as well as handy online tools from loan calculators to car value assessments to help you narrow down your search. You can even apply for a loan online right here!
Just click here, or call us at 603-645-8181.4 Comment(s)
What is an ARM?
Adjustable Rate Mortgage (ARM) is an important term, especially if you are in the market to buy a new home.
ARM Definition: a mortgage having an interest rate which is usually initially lower than that of a mortgage with a fixed rate, but is adjusted periodically.
Bellwether’s 5/5 ARM is unique because it is a variable rate mortgage with longer periods of stability. Most ARMs have an initial term, but then switch to adjusting every year. Bellwether's 5/5 ARM rate is set at the start and stays at that rate for the first 5 years, then adjusts every 5 years. Our 5/5 is more stable than a 3/1 or 5/1 ARM which adjust annually after the first period.
Understanding the Rate System
The most appealing feature to the 5/5 ARM is that the rate only fluctuates every 5 years. As with all ARM products there are limits, and the rates cannot continue to fluctuate past a certain point. These limits are called caps. At Bellwether Community Credit Union the 5/5 has 2/2/5 caps.
- Initial Adjustment Cap
- Periodic Adjustment Cap
- Lifetime Cap
The initial adjustment cap is the amount the rate can change up or down at the first adjustment period. With the 5/5 ARM this cap is 2%.
The periodic adjustment cap is the maximum the rate could change up or down in subsequent adjustment periods. With the 5/5 ARM this cap is every 5 years up to 2%.
The lifetime cap is the maximum percentage that the rate can change over the life of the loan. With the 5/5 ARM the maximum percentage is 5%.
Why Bellwether’s 5/5 ARM is perfect for you
Bankrate recently posted their “Top 10 Tips for Mortgage Borrowers in 2014” and an Adjustable Rate Mortgage landed on the list. The average family moves every 7 years. If you are one of these families, a 5/5 ARM would be a great option because your rate would only be subject to change once in that time frame and only by 2% maximum. This allows you to plan for that “worst case scenario.” ARMs are also perfect for:
- First time home buyers
- Families planning to relocate within the foreseeable future
- Refinancing your ARM or Fixed Rate Mortgage
If you determine that a 5/5 ARM is right for you, check our current rates and find out more!
How to be cost efficient and still enjoy your summer
For most New Englanders, summer is a time to venture outside, enjoy the warm weather, and stay active before the snow comes back. Even on a budget, there are ways to make the most out of your summer without an elaborate vacation.
Check out this link to Visit NH and you’ll find that New Hampshire is a great state to explore because it offers coastline, mountains, arts and culture.
Venture to the White Mountains
If you enjoy the great outdoors, the White Mountains are the perfect spot for a summer getaway! State parks usually also have low admission fees. I'd suggest the following as activities in the White Mountains that won’t break your budget:
- Camping - A fun activity for the whole family. Check out this great list of campgrounds from the NH State Parks website. Most are near lakes so you can enjoy an afternoon of swimming or boating, and another plus, a number of campgrounds are also pet-friendly.
- Hiking - The Granite State is full of trails and mountains available to the public. Check out this list from Hike-NH. You’ll have fun, and enjoy a good workout!
- Sightseeing - Only have a day to travel? Discover everything New Hampshire has to offer by taking a scenic drive! Visit the National Scenic Byways Program to discover the most scenic routes! If you prefer to take a train ride, the White Mountains have several stations that offer both scenic rides and dinner trains.
Enjoy the Seacoast
If you enjoy the beach, visit the coastline in the southern part of the state. New Hampshire is home to 5 State Park beaches along the beautiful Northeast seacoast. The beach can be a free activity if you try the following tips to avoid added costs.
- Street parking - Arrive early to find spots that don’t require feeding a meter or paying a lot fee.
- Pack your own lunch - Bring a cooler, sandwiches, snacks, and drinks instead of paying high prices at a concession stand.
- Bring your own gear - Pack your own sunscreen, towels, floats, and toys rather than buying them when you get there.
Discover Arts & Culture
Find live music events, museums, fairs, and community activities. These are all great places to bring the whole family without breaking the bank. Be as frugal as possible and look for:
- Free child admission
- Discount days
- Group deals
Every little bit counts! Don’t miss out on all that NH offers.
Appreciate at Home Fun
Back yard barbeques are great for a friends-and-family get together. To create added entertainment and save money, US News outlines the following recommendations:
- Shop for foods at your local farmers market
- Create recipes for themed meals.
- Take turns hosting
Remember, you don’t have to miss out on a fun, enjoyable summer just because you’re living on a budget. Use these tips and track your spending to have a fun, safe, and more affordable summer season!
A few weeks ago I attended a local Young Professionals Scavenger Hunt – it was part race, part contest, part bar-crawl (minus the alcohol), but largely a ton of fun with my friends and meeting other people. The object was to complete all the tasks in the least amount of time, with a 5-hour time limit. There were approximately 12 teams, ranging from groups of 2 to 8 adventure-seeking professionals of all ages. Once our team checked in, we received our bibs (just like you’d get at a road race), a sealed manila envelope, and food tickets. After a brief overview of the rules and expectations, the clock started and we were on our way.
Planning our attack.
We immediately opened our envelope and discovered we had 12 “clues” related to locations around the town and a map of the city. The first 4 clues were actual photos of the specific locations that we needed to first, locate, then recreate the photo with all of our team members in it. We then had to submit these clues by email to get full credit. We skimmed thru the list to determine which clues we already knew and mark that clue number on the map. Once we had determined the majority, we were off and running.
Collecting the Goods.
As we reached each location there was either a photo to take or prize to obtain. Most of the clues were pretty challenging, and we learned the hard way that we needed to read the clues carefully. Specifically, one of the clues actually told us that a specific location didn’t open until 3pm, so when we arrived at 1pm we were greatly disappointed. We collected all the items: butterfly wings, princess crown, koozies & tent card, as well as took all the required photos, with some help from local people and other teams!
Crossing the Finish Line.
With about an hour to spare, we arrived at the final location, sadly, we weren’t the first ones. Maybe it was because no one on our team was actually from that city (we all live over an hour away) or when we submitted 2 incorrect photo clues. But we finished 3rd out of 12 teams and received special recognition for being the 1st team to complete one of the photo clues. We were rewarded with t-shirts, glassware and other fun prizes. Then, we got to enjoy some delicious food while we watched a slideshow of all the team photos that were submitted.
This event was a great way to get to know the city, get some exercise outside, and spend time with your friends. Are you looking for something fun to do around your town? Or maybe find a way to make some new friends? Look into your local Chamber of Commerce or Young Professionals Network; they are a great resource for local events.2 Comment(s)