Build with Bell

AS

Building a home is a very exciting endeavor and comes with unique challenges. Bell is here to help you navigate this complex process. The first step in the journey is determining your budget and confirming your ability to obtain financing to build your dream home.

Our dedicated lending professionals will partner with you to make the process as straightforward and hassle-free as possible. From the application process through the closing of your loan, we’ll be there to help you make the most informed decisions, ensuring you obtain the best financing option to make your home-building dreams come true!

THE BENEFITS

OF BUILDING WITH BELL

Whether you use one of Bell’s borrowerfinanced construction loans or buy a builder-financed home, Bell has decades of experience financing new construction projects. Bell’s reputation as a premier mortgage lender is never more important than when building a new home or renovating an existing home. Our knowledge and experience will be a tremendous advantage in terms of preparation, execution, and satisfaction during your mortgage experience at Bell.

Bell’s appetite for new construction and renovation lending sets us apart in the industry. Because of this commitment, Bell has established a full-time, fully-staffed construction lending department focused on providing the highest quality customer experience. Our reputation within the builder community, as well as with the title company participants, is a pass-through benefit to you, our customer.

3 Bell offers a wide variety of mortgage options for your construction or renovation project. This includes programs that require as little as 1% down for builder financed construction. Our borrower financed options include the popular One-Time Close loan, renovation financing, and lot loans.

STEPS

BUILD

You’ve decided it’s time to make a move. Maybe you’ve outgrown your current space, or you’re ready to invest in your future with your first-ever home purchase … and you’ve decided to build. The best place to start the process is right here at Bell Bank. Our in-house new-construction team will help you determine your budget and evaluate which financing options will fit you best. Setting your budget is always the first step.

If you haven’t already selected a builder, there are some steps to take that can help with that decision. Talk to friends or family who may have built or renovated a home. This is a great referral source. Visit model homes and research the finished product of builders in your price range. Perform social media searches for builders in your area. This is an efficient way to gain exposure to builders with whom you may not be familiar.

What are your plans for the future? Will you be starting a family or expanding your household? Do you want more space or a better view? Do you want to be closer to work or family? We help you determine your budget, and you and your builder will come up with a price to make it all come together!

– WHAT’S NEEDED? DOCUMENTATION

With any home purchase comes a fair amount of paperwork, which can feel overwhelming if you don’t have help (that’s why we’re here). All this paperwork is necessary to protect you against building a home you won’t be able to afford. Our in-house team will walk you through the entire process and help you prepare and submit each of the following:

W-2s for the past two years (as well as 1099s and K-1s, if applicable)

Federal tax returns for the past two years –all pages and schedules

Business tax returns – all pages and schedules

Year-to-date business profit and loss statement

Current 30 days’ pay stubs

Bank statements for past two months –all numbered pages (even if blank or advertisement)

Investment and retirement statements for past two months – all pages

Copy of current mortgage statement for all properties owned

Current property tax bills for all properties owned

Homeowners insurance declaration pages for all properties owned

Legible copy of photo ID for each borrower

Copy of signed purchase offer for:

Property being purchased

Property being sold

If lot is already owned, copy of title policy

If lot was purchased in last 12 months, copy of settlement statement

Building contract, specifications and plans

RENOVATION PROJECTS

If the thought of building a new home is overwhelming, consider renovating an existing property. This option can be used on a home you are purchasing or the home you already own. Financing from Bell becomes a powerful tool that will help you alter an existing structure to fit exactly what you need. Rearrange your current layout, or add new space to accommodate your personal tastes:

Redesign

Update

lower

of the

or even

CLOSING OPTIONS

VS.

ONE-TIME CLOSE (OTC)

Sometimes it makes sense to simplify, and Bell Bank’s special one-time close option for new construction means you can avoid the hassle and additional costs of having to close twice.

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One big benefit of an OTC loan is the ability to lock in your interest rate up front to avoid rising rates during the construction process. Another benefit is saving time on documentation and paperwork – once you close on an OTC loan, you’re free to focus on the build process without worrying about having to submit more documents along the way. Simplicity!

OTC STEP-BY-STEP PROCESS

1. Complete your online mortgage application and upload required documentation.

2.. Review construction loan programs and qualifying information with your Bell new-construction lender and determine your down payment amount.

3. With asset and income documentation complete, including an appraisal of your home plan from the builder, a loan package will be submitted for approval.

4. Upon approval, you can close on the construction loan. The loan’s interest rate is locked prior to closing and remains locked for the entire loan term.

5. Your builder will request funds, also known as draws, throughout the construction phase – all handled by Bell. During this time, you will only be charged interest-only payments on whatever is drawn from your construction loan. At the time of payment conversion, the monthly payment switches from interest-only to its predetermined, fully amortized amount.

6. Upon completion of the home, we complete a recertification of value and final inspection. No reverification of assets, credit or income is needed.

TWO-TIME CLOSE

A two-time close construction loan is an alternative option for financing a construction project. One loan provides the funds to buy (if necessary) the site and to fund the improvements. The second loan pays off the construction financing by refinancing the existing debt into whatever loan option you prefer. A twotime close transaction requires two loan approval events and costs slightly more than an OTC.

Flexibility is the biggest benefit of the two-time close financing option. This option better manages the ability to cover cost overruns, changes to the scope of your project, and allows the ability to change the original choice of the permanent financing terms.

TWO-TIME CLOSE STEP-BY-STEP PROCESS

1. Either just prior to, or after the closing of the construction loan, the interest rate for the permanent financing phase can be secured using Bell’s extended lock option. Talk to your Bell mortgage professional for more detail on this incredible option.

2. Same as OTC

3. As your project approaches completion, you and your Bell mortgage professional will begin the process of submitting your permanent financing loan for approval. Since much of your documentation has already been provided, we’ll often just need updated information of certain items. We’ll also obtain a recertification of value and final inspection to prepare for the refinance loan closing.

BUY NOW,

BUILD LATER

If you’ve ever worked with a real estate agent, you’ve probably heard that “location is everything.” Why?

Because you can always make changes to your home, but you can never change its location.

Sometimes the right lot becomes available before you’re ready to build your new home.

Bell Bank can help you finance the purchase of a residential lot and guide you through the entire process, from buying the lot to making the transition to the construction phase of your new home.

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Our in-house team of new-construction lenders offers residential lot loans lot loans for vacant land or sites with structures that are intended to be renovated or torn down.

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Our lot loan is a financing option intended to allow a customer to secure a desired lot, prior to being ready with project documentation, giving them time to select a builder and finalize plans to build or renovate

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12 Bell lot loans are intended for future construction projects, not as a means of acquiring recreational land.

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What’s the difference between a construction loan and a loan for a new construction?

The difference is simply who is financing the cost of the project. A construction loan is financing provided for a new home project in the name of the borrower. A loan for new construction is a traditional home mortgage loan for a completed, newly built home that has been financed by the builder.

How does the mortgage application process differ for a new construction home?

A borrower-financed construction loan is very similar in terms of analysis of credit, income and assets. The only additional area of scrutiny would be on the post-close asset strength of the borrower to confirm a source of funds for cost overruns or changes that may occur during the build.

How finished does a home have to be before you close? With a one-time close (OTC), we close up-front before construction begins. On a two-time close, the home must be substantially complete, per plans and specs, to close the end loan refinance of the interim construction loan used to complete the improvements.

Do I have to use the builder’s lender? No. The builder can recommend, and sometimes incentivize, the borrower to use a particular lender, but a consumer is free to choose whomever they wish to finance the project or purchase.

When do I begin principal and interest payments?

With an OTC loan, on the ninth month for a conforming loan amount and the 13th month on a jumbo loan amount. With two-time close, your payments begin after the second close.

May I act as my own general contractor/builder? No. Bell Bank does not provide construction financing for self-build transactions.

When can I lock-in my construction loan?

OTC – At the beginning of the process. We offer 30-, 45-, 60-, 75- and 90-day lock options. Once the loan is locked and the loan closes, the rate remains locked for the duration of the loan term.

Two-time close – The construction phase rate is locked up-front and the permanent phase financing (end-loan refi) can either float during the construction phase, or an extended lock can be secured to protect against rate volatility.

If my builder requires a deposit, how is this handled?

It can be paid prior to the construction loan closing or, in certain circumstances, can come from construction loan funds.

What is a draw?

The process of a builder requesting funds from the construction loan to cover costs associated with the project based on progress. All draws are required to be confirmed by the you, the borrower.

Can I make changes to the home after we have started?

If your builder allows for changes to be made mid-process, yes. However, any additional costs related to the changes need to be communicated and factored into the funding of the project for either the OTC or two-time close.

Do I need to insure the new home during construction?

Yes, builder’s risk coverage (can be provided by borrower or contractor) and general liability coverage (provided by the contractor) need to be in place during construction.