Friday, May 31, 2013

Flashback & The Catch 22

While we were working on the plans and getting ready to demo we were also going through the Credit Union for our construction loan (I have yet to have a rich ancestor...) and dealing with all of that paperwork.  Working with a finance person can always seem a bit daunting but we had a great person to work with. However they still had their rules. Which made sense. I think.
Here’s where the Catch 22 comes in. The credit union requires a building permit in order to finance the construction. So off to the Town’s Building Inspector we went for our building permit. In our town, I think we’re lucky to have the building inspector that we do. He treats everyone fairly, equally and with respect; the three basic qualities that taxpayers expect from a municipal official. But, being fair and equal means that he too has rules. Which we needed to follow. It turns out we could not get a building permit for a new house because there was already one on the lot and two aren’t allowed. The old one would have to be demo’d first.

Hmmm, but wait, we have a mortgage with another bank on the old house. That could be a bit of a problem if they drive by and notice that their collateral is missing. Also, once I tear it down what assurances do I have that the credit union isn’t going to change their mind (tanking economy) and not fund the construction? I would be left with a mortgage on an empty lot. We’re this close and now this?

After a series of discussions, handwringing and thoughts of putting a For Sale sign out front, the Builder and the Credit Union (both of whom have a good working relationship which pays off for the home owner) and we worked it all out. We closed on the construction loan, paid off the other mortgage and were able to apply for the demo permit.
Ready, set…, Stop!

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