Over the past couple of months we had been working with a bank to get a construction loan. We were not the typical loan seekers.
First we already owned the land. Second we were our own contractors using a floor plan we designed. Third we had already started building the home with our own money. I quickly decided that the bank would have preferred that we were using a purchased floor plan for a home to be built by a professional builder and that we would need to borrow money to pay for both the new house and the land.
We filled out the preliminary paperwork and were then asked to submit information on the costs. I kept asking what was needed but never got a straight answer (or a crooked one for that matter). After some research of my own, I found a free cost estimate spreadsheet from Build Your Own Home. I was able to adjust some of the categories to fit our needs. I guess it was what the bank wanted. We opted to get builders' risk insurance on our own ahead of time.
After about 6 weeks of waiting, the construction loan was approved, and we signed the paperwork. We did end up asking for more money than we plan to spend to make the bank people feel better. We are not obligated to use the full amount though. We will need the appraiser to approve any amount we ask to use which is $0 at this point. We do have one year to finish the house. W plans to be done long before then so we have plenty of wiggle room.
I plan to keep a close eye on our spending and we will still use any of our money. I do not want to use any more of the bank's money than necessary so we will be able to pay off the loan as quickly as possible.