New Construction Loans

Buying a home may require a mortgage, but building your dream home requires a different type of mortgage – a construction loan. New construction loans can help pay for home building or renovations and work differently from traditional loans. We’ll delve into what you need to know about a construction loan and how it works. 

 

What is a new construction loan?

A construction loan is a short-term loan that covers the costs of work and materials for new-build homes. Some of the items you can finance with a construction loan include permits, contractor labor, roof framing costs, and many other expenses that come with building a house. 

 

Types of New Construction Loans

Construction lenders provide different types of loans for a variety of homebuilding scenarios. Here are some financing options when building a new house:

 

Construction-to-Permanent

Also known as “single-close” construction loans, this type of loan converts to a permanent mortgage after construction is completed. The benefit with construction-to-permanent is that there is only one set of closing costs to pay, reducing your overall fees.

 

Construction-only

Construction-only loans are also referred to as “two-close” construction loans that require closing on two different loans. The first loan is taken out for the construction. Once work is completed, the loan is paid off with a new loan, called an end loan. The end loan is based on terms locked-in as the home nears completion. 

 

Renovation Construction Loan 

If you want to upgrade your existing home instead of building one, you can look for a renovation loan. This type of loan comes in various forms depending on the amount of money you’re planning on spending. 

 

How Construction Loans Work

As mentioned previously, new home construction loans work much differently from the typical mortgage loans. The lender pays the loan to the contractor, not the borrower, in installments. Once the project has been completed, construction loans can be either converted to permanent mortgage or paid in full. 

 

How to get a Home Construction Loan

Before applying for a loan, the borrower should meet with the designated contractor to understand the total cost to build so a  loan amount can be established. The lender will then review a borrowers’ employment history, savings, income stability, and ability to pay back the loan. A property appraisal will also be obtained to support the value of the project. To qualify you will need an excellent credit score, stable income, low debt-to-income ratio, and a down payment of 20 percent. 

 

How to Find a Lender

It is important to find a lender who specializes in construction lending and isn’t new to the process. Research several lenders to obtain detailed information about their background and specific programs. We recommend that you compare construction loan rates, terms, and down payment requirements to make sure you’re getting the best deal possible. 

 

Questions to Ask Your Contractor

Finding the right general contractor for your project isn’t easy. Knowing there are plenty of important questions you need to ask potential contractors isn’t surprising, but exactly which questions to ask are crucial to the searching and hiring process. 

With that in mind, at Horton Group, we appreciate any questions our clients have. We gathered some crucial topics to discuss with a general contractor before you start working on the project together.   

Can you tell me more about your business?

Find several contractors near you and do your research ahead of time. Investigate how long the contractor has been in business and the structure of their business. Asking for business history is highly recommended as you can have a better understanding of its journey and systems set in place. 

Do you have a contracting license and certificate of insurance? 

Cities and states have different regulations on whether contractors must obtain a license. Ensure your contractor has gone through all of the necessary procedures to obtain required certifications. Furthermore, not only should you ask your contractor if they are insured, but how they are insured. All contractors should have both workers compensation and liability insurance for the specific work they perform. 

contractor and permits

Will you assist in obtaining the permits and set up the inspections required for this project? 

Not all projects require permits or inspections, but most remodeling projects can affect the structure of the home. Your potential contractor should know what kind of permits you need and how to get them. Many will also help obtain those permits for you. 

What is your timeline? 

Before you hire a contractor, ask if they can provide a start and completion date. These dates should be included in the formal writing agreement. We also recommend factoring in clean up duties and delivery delays. Additional scheduling questions you may want to ask include: 

  • Are there any other projects you’re working on now that could affect our schedule?
  • Do you have any current bids that haven’t been finalized that could impact this job?

What is your payment schedule like? 

Request price estimates from each candidate. Learn about the payment schedule and determine how surprise expenses will be factored into the budget. The Better Business Bureau advises never paying for the full price of contracting work upfront. A down payment, followed by scheduled payments, is typical protocol.

questions to ask your contractor

What are your working days like? 

Having an understanding and expectations of the contractor’s routine is vital to the hiring process. It’s important for both homeowners and contractors to know what to expect on construction days even before work begins. You can explain to your contractor what the parking situation is like, which restrooms if any are available, and if anyone will be home during construction. 

How can I get in touch with you?

Communication is always key. You need to have a clear understanding of who your point of contact is so you can ask any questions during the construction process. It is also important to get a physical business address along with business or cell phone numbers of the contractor you are working with. 

 

Although finding the right contractor for your project can require a lot of research, having a specific strategy in your mind before you start looking can make the process a whole a lot easier. If you have any questions, contact us!

 

How to Plan Your Next Renovation

What is your plan for tackling your next renovation project? A home renovation project can be overwhelming, but with a little prep work and organization, you’ll be able to plan a home improvement like a seasoned pro. Keep reading to get the inside scoop on the work that goes into planning a remodel. 

Develop a Plan

plan for your renovation

First things first, you can’t start your project until you know what the final product will be. Begin with a clear understanding of your renovation goal. This is truly a process where you have to work backward, but once you have your endpoint in mind, you can create a step-by-step plan on how to get there. Your project plan should include blueprints or sketches of the finished project, a list of needs and wants, and a detailed list of project steps. 

Determine Your Budget

determine a budget for your renovation

Next, determine your budget. We recommend speaking to a professional contractor to help you set an estimated budget. Consider factors such as permits, materials, and expected labor costs. In addition,  plan for some unexpected costs. If your budget estimates are not what you expected, go back to your plan and eliminate project elements that are lower priority. 

Build a Timeline

timeline

At this point, you should have a solid idea of all the required project steps. Choose your desired start date and work with your contractor to schedule a projected completion date. Be sure your timeline includes time to clean out the work area and allows for shipping and delivery of materials. 

Look for Professionals

The Horton Group

The quality of your home renovation project and completion depends on the expertise of the workmanship. Discuss with your contractor what you expect of them, the terms and conditions, and notify them in advance of your expected timeline. Even if this isn’t your first time planning a remodel, don’t be afraid to rely on professional advice. At The Horton Group, we are always willing to answer any questions you have about your future remodeling project.  

Taking the time to create a solid plan before you start construction will put you on the right path for home improvements. If you have any questions, contact us!

 

How to Choose a Supplier

Building and restoring top-quality residences begins with the materials we work with. From concrete to siding to lumber, the right building material is essential in our business. 

Over the years, The Horton Group has built trusted relationships with product manufacturers to ensure we are getting quality materials on a timeline that works for our clients. As we continue to work through these challenging times, we are more grateful than ever for trusted suppliers who are willing to go the extra mile for their customers. 

When selecting a supplier or product manufacturer, look for these qualities to ensure you are getting quality resources from a reliable company:

Experience & Knowledge

What experience does the company have in the field? Learn who has used their materials, look at finished projects, and read client testimonials. Years in the business can indicate a business that has built trust, but it is not the only evidence of knowledge in the field. 

Quality

You need to be on the same page as the manufacturer when it comes to quality. Do you have the same expectations? You can also visit the production floor to see how they treat the goods they handle on a daily basis. 

Product Diversity

It’s good to have options. How many different selections does the supplier have on hand? If they don’t have something you are looking for, inquire about how they can source your desired materials.

Accountability

Timelines are often tight in our industry. Make sure you find a manufacturer you can trust, not only for the quality of the materials, but also the timeliness and delivery of those materials. 

Communication

Excellent communication is a must between the supplier and the buyer. Determine how reliable they are with answering questions and responding in a timely manner. 

Training and Education

As the world advances, so should our materials. Ask your supplier how they stay on top of new technology, green materials, and best practices. 

Warranty

Does a warranty back the materials? Learn about the standards of the material and the supplier. This way, if something goes wrong, you know what your options are.

It’s always exciting to work on a new project, pick out materials you love, and watch your vision come to life. Remember there are many working parts to any home construction work, and working with the right people will make the process go as smoothly as possible.

How Builders are Responding to Changing Times

Connecticut, like many states, has deemed construction as an essential business. Builders and developers have quickly adapted to make worksites and client interactions safe for all. 

According to a recent survey of NAHB members, several measures are being implemented that allow the construction industry to continue to build and sell homes. 

The majority of those who responded stated that non-construction employees are working from home during these times. Also, instead of open hours for tours, 59% of those surveyed are scheduling private showings. 

Though not mentioned in the survey, many builders are also implementing virtual options. At the Residences at 66 High Street, interested parties can either schedule a private showing (two people per showing), or a virtual showing. We are able to utilize technology to best fit the needs of every individual. 

Even with an essential business status, not all construction jobs have continued. Of those surveyed, 48% have halted construction projects, or will do so in the near future. Fortunately, however, only 25% have needed to lay off or furlough workers. 

At The Horton Group, we continue to make adaptations and follow CDC guidelines so we can continue to move forward safely. 

 

Community Spaces in Development: More Important than Ever

We’re all seeing it: the Zoom calls, car parades, and balcony gatherings. People are supporting local businesses, showing thanks to those on the front lines, and donating to those in need. 

Even though we are physically separated, our communities are growing stronger than ever. It’s made us think about the growing trend we have seen in new developments – one that will likely continue long after this has passed. 

Master Planned Communities

From developments with single-family homes to mixed-use construction, developers have been focusing on incorporating more community spaces over the past few years.

At 66 High Street, the pool, once installed, will be a gathering place in summer. Before the current health crisis, residents often walked downtown together, and met up in each other’s units for a glass of wine and some conversation.  

At Overland Lofts in Springfield, community spaces will be available for residents only. Since the building is mixed-use, there will also be stores, cafes, and restaurants that people from all over downtown can enjoy together. 

Developments all over the country have already started adding in more community spaces. Why? Because it brings people together. Now, more than ever, we see how important connection is. 

What to Watch For

One thing we’ve all learned recently is that connection can still happen when we are separated. While we know developers will continue incorporating spaces for gathering in person, we anticipate that builders will also start thinking about how to integrate technology. Here are some things to watch for in development, according to Best in American Living:

  1. Personalized concierge sales experiences, including a mix of technology and human interaction.
  2. New ways to access amenities so people can gather utilizing technology. 
  3. Tech-enabled events and participation, such as online book clubs, art classes, or movie nights.
  4. Greater integration between homebuilders and community developers throughout real estate transactions, including virtual tours for potential buyers. 
  5. Doubling down on outdoor spaces for walking, biking, and gathering. 

 

What would you like to see in a residential development? Let us know!

What is a HERS Index?

There are plenty of ways to make your home more energy-efficient. As homeowners, you know that with every scheduled maintenance and every home purchase, there are ways to save energy, money, and have a more sustainable household. 

With all of the options available, it can be overwhelming to sort through what will help your home run more efficiently, and what isn’t necessary. That is where the HERS Index can help.

What is the HERS Index?

The Home Energy Rating System (HERS) Index is the nationally recognized system to assess a home’s energy performance. 

HERS scores are designed to calculate the energy efficiency of new or remodeled homes. If you are in the market to buy a brand new home, the HERS score will give you an idea of the energy costs for the house.

How do you find out the HERS Index Score?

A certified HERS Rater can determine the HERS Index Score of your home. They will complete an onsite energy rating of the home, and then compare the data to a reference home. The reference home is an analysis tool designed to resemble the actual house in size, shape, style, environment, and climate. 

What does the score mean?

The HERS Index ranges from 0 to 150, with 0 being a home that produces or conserves as much energy as it uses. While a score of 0 is unlikely, the lower the score, the more energy-efficient the home.

The standard new home typically has a rating of 100, while the typical resale home has a score of 130. Using these scores as reference points, you can get an idea of how efficient your home is. 

How can I improve my home’s HERS Index Score?

The greatest energy expenses in a house are for heating and cooling. Whether you are remodeling your entire home or just looking for a way to save on energy costs, you can get a programmable thermostat, upgrade your HVAC system, or simply get an annual tune-up to make sure it is working properly. 

Other energy-saving tips include: sealing all air leaks, add insulation, upgrade to ENERGY STAR appliances, and consider installing solar panels

A HERS index rating can help you determine what type of fixes will be most beneficial for your home. 

 

Fiberglass vs. Spray Foam Insulation

Insulation may be hidden behind the walls, but it plays a big role in keeping you comfortable all year long. 

The job of insulation is to keep the house warm during the winter and cool during summer. With heating and cooling accounting for about half of the energy used in the home, proper insulation can cut back on energy usage and save homeowners money. 

Keep reading for a comparison between two types of insulation: fiberglass and spray foam. 

Fiberglass

Fiberglass insulation is the more traditional form of insulation. This type of insulation comes in pre-cut rolls or blown-in loose fill. It works to regulate air temperature by trapping air inside tiny glass fibers, slowing the transfer of heat. 

Pros of Fiberglass

Fiberglass insulation is inexpensive to install when compared to other types of insulation. It comes in pre-made R-Values, and it maintains performance levels for an extended period of time. Fiberglass is also easy to install.

Cons of Fiberglass

Though commonly used and easy to install, fiberglass is not as effective as spray foam at maintaining comfortable temperatures. Fiberglass cannot fit into every crevice, which can allow for air leaks. This is especially true in colder regions.

Spray Foam

Spray foam insulation is newer than fiberglass and is becoming more popular in homes. Spray foam is installed by spraying a polyurethane foam into walls and ceilings. The foam expands to create an airtight seal. Spray foam can be used as the primary method of insulation or as a supplement to existing insulation.

Pros of Spray Foam

Since spray foam creates an airtight seal, it protects against pests, rodents, and mold, in addition to its insulating properties. It is more energy-efficient than fiberglass, sealing off any crevices so air cannot leak in. It also has a longer lifespan, because it does not break down or sag over time.

Cons of Spray Foam

Spray foam is more expensive than fiberglass. In addition, spray foam should be applied by a professional, which increases the cost even more. The installation process can be messy, so make sure you work with a professional who has experience with spray foam.

If you are ready for new insulation, speak with your contractor to determine what type is the best option for your home. 

 

Solar Roof Panels vs. Solar Shingles

As solar roof technology becomes more advanced, homeowners have more options when making the switch to solar energy. 

Solar roofs are enticing because they harness the sun’s solar energy to generate electricity for the home, potentially saving money and energy. While solar panels have become a common sight in neighborhoods across the country, solar shingles are also becoming more mainstream. 

What is the better option for your home? Below, we compare solar panels and shingles to help with the decision. 

Solar Roof Panels

Solar panels are large panels that are installed on top of the shingles on the roof. Several panels are installed on the roof, generating electricity that can be used by the household. 

Pros of Solar Roof Panels

  • Solar panels maximize electricity production. 
  • Solar panels can be angled to gather sunlight. Some types of panels can swivel and adjust throughout the day.
  • Solar panels can be placed on your property, as well as the roof.  
  • You can have the panels removed and bring them with you to a new house.

Cons of Solar Roof Panels

  • Panels appear bulky. 
  • The installation of solar panels involves many steps and requires electrical inspections.

Solar Shingles

Solar shingles are a more recent technology than solar panels and are designed to look to typical roof shingles. Solar shingles have two functions: to protect the roof and to generate electricity. 

Pros of Solar Shingles

  • Solar singles are more aesthetically appealing, blending in with other shingles of the roof. 
  • Solar shingles can double as shingles, so if replacing the entire roof, it can be cost-effective.
  • Solar shingles are easier to install than panels. 

Cons of Solar Shingles

  • Solar shingles are less energy efficient than solar panels.
  • The roof needs a particular slope with ample sunlight exposure.
  • The lifespan of solar shingles is less than panels. 
  • Removing solar shingles is not an option because they serve as the roof shingles.

Solar energy can save money and energy over time. When making the switch to solar energy, always consult a professional to determine what your options are. 

What is MEP Engineering?

When building, people are often amazed at the floorplan, visual aspects of the structure, and the timeline.

The behind-the-scenes (or in our case the behind-the-walls) elements don’t garner much attention. Yet the mechanical, electrical, and plumbing systems keep people comfortable. 

What are MEP Systems?

MEP stands for mechanical, electrical, and plumbing. Let’s break down each system here:

  • Mechanical. Mechanical systems include heating and cooling systems, allowing people to stay comfortable inside, no matter the temperature outside.
  • Electrical. Electrical systems keep us connected. We all know how inconvenient it is when the electricity goes out. Electrical systems keep the lights on and other systems running.
  • Plumbing. Plumbing systems provide clean water for drinking, bathing, and cleaning while removing wastewater. 

 

What is MEP Engineering?

MEP Engineering is the design and construction of the mechanical, electrical, and plumbing systems in a building or residence. MEP engineers, or consulting firms, are often used when large buildings are being constructed. They design, estimate costs, and build MEP systems so that the interior spaces are ideal for comfort at home or work.

Benefits of MEP Engineering

It may seem pretty straightforward to install heating, cooling, lighting, and plumbing in a building. When done poorly, it can result in uncomfortable conditions: too hot or too cold, poor lighting, noisy HVAC systems, and inefficient use of energy. 

When strategically designed, MEP engineering can:

  • Lower costs
  • Improve lighting
  • Improve heating and cooling
  • Solve water or plumbing issues
  • Conserve water
  • Conserve energy
  • Automate building systems
  • Improve concentration and mood in the workplace
  • Increase comfort

While MEP Engineering may not be necessary for a single-family home, thoughtful planning and design in offices and multi-unit residences is essential. 

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