Here are excerpts from our 4th Quarter 2006 Issue of MoneyTalk$,
First Community Bank's quarterly newsletter.
So you want to buy and rehab a property, but you are
not exactly sure how to finance the project? At First Community Bank,
these types of loans are our specialty.
The first segment of the loan process is the same as
applying for most home loans, simply supply the last three years tax
returns with W-2's, one month of pay stubs, asset information,
insurance, and loan application.
The second segment of the rehab loan involves the plans for rehabbing
the house. You will want to submit the builder qualifications, project
cost estimates, line item budgets, and descriptions of materials to be
used. The budget should include a 10% overrun amount in case of
unforeseen or increased material cost during the project. This
information will be used by the appraiser in determining the value of
the house after the project, what is referred to as the 'subject to' or
'after completion' value. Typically, FCB will lend up to 75% of the
appraised value or 90% of the hard cost which ever is lower.
The terms of the loan allow for interest-only
payments to be made during the rehab period. This period may be from 3
to 12 months depending on the project, and the borrower will make
between 3 and 6 draws during this time. After the rehab phrase the loan
will start its normal amortization schedule. FCB offers these programs
for consumers and investors.
Get the peace of mind knowing that your valuable
belongings and important papers and documents are all together in a safe
place.
Sizes range from 3" x 5" to 10" x 10" and prices
range from only $30 to $85 a year.
Safe Deposit Boxes are available in our E. Broad Street and Sedalia
locations.
Although we have seen these several times and have
made every effort to educate our customers about these, people are
always wishing you can get something for nothing. Keep this in mind: if
it's too good to be true, it probably is.
Recently, a customer of ours received a letter
informing him that he had won the Canadian Lottery and that to claim his
winnings, he need only to cash the enclosed check and send a payment
back to them to cover "taxes".
Another benefit of banking with a smaller bank is
that we know our customers. Our staff, realizing this was out of the
ordinary for this customer, asked about the check when the customer came
in to make the deposit seeking to follow the letter's instructions and
found out it was a scam. This quick thinking by our experienced staff,
potentially saved our customer a loss of several thousand dollars. He
was lucky. Not everyone is.
If you receive an email or a letter or even a phone
call from someone telling you that you have won a lottery or even an
inheritance or someone needing help getting money out of a foreign
country, be skeptical. Get a phone number and we'll try and help you
follow it up to determine if it's real or not.
When asked, the customer admitted that he has never played the
Canadian lottery, but thought he had won nonetheless. Remember, you've
got to buy the ticket first!!!
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Article 1 REHAB Loans