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Getting a Construction Loan Vs A Mortgage Loan – Learn the Differences

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Unless you plan to pay cash for your home building project, you will need to obtain financing for the construction and a mortgage for the outstanding balance when it’s finished. While you may have qualified for a mortgage loan before, getting a construction loan for your home building project can be a little challenging. 

Although it’s certainly possible to get a construction loan as an owner-builder, lenders may shy away from you at first, thinking that you aren’t qualified to handle such an undertaking. Consequently, it’s important to be very prepared and to show yourself in a capable, competent light when presenting your case to the lender. For example, don’t say, “I’ve never really done this before, but I’m willing to give it a stab.” Instead, be positive, prepared and professional. Never lie, but anticipate questions and concerns and have answers ready.

There are several types of construction loans to choose from, but one of the most popular for people building their own home is a construction loan that converts to a permanent loan once the home is complete.  Although there are no standard specifications for this type loan, as a guideline, most only require that you pay closing costs once. That saves some money and makes the process easier.  You don’t have to go through the qualification process twice.   The downside is that it is next to impossible to lock-in a permanent mortgage rate, since you won’t be closing the loan for six months to one year.

No matter what type construction loan you choose, you will likely be required to pay monthly interest on the construction loan amount during the construction phase. The amount you owe each month will depend on the amount you have “drawn” out of the loan, not the overall amount that you are allowed to borrow. If you are approved for a construction loan of $100,000 but you have only drawn $50,000 then your interest payment will based on $50,000. Typically construction loans are standard interest (not amortized) and are one or two percent over the prime rate, or whatever you have negotiated with your lender. 

Qualifying for a construction goes beyond the income and credit qualification requirements for a standard mortgage loan.  Bankers or lenders will want to know how you plan to tackle your project and that you are capable of building a home yourself. A thorough presentation to the bank will be in order. The following is an outline of what you will need to apply for a construction loan:

  • all the same financial information you would provide to get a standard mortgage loan (financial statements, income verification, credit report, etc.)
  • a set of your plans (they may ask for several copies)
  • detailed specifications (the materials and finishes you plan to use)
  • an estimate of the cost
  • an appraisal (ordered by the lending institution.  The appraiser will use the plans, specifications and lot value to determine the amount)
  • your lot information (whether you own it, etc.)
  • contractor bids (not necessarily required, but might be if this is your first project)

You might also consider providing any other documentation you can think of that will help indicate your ability and preparedness to complete your project. The bank is essentially becomes a silent partner in your project and will be concerned about the home being properly built.  Demonstrating your ability to handle the project is key here.

Bitcoin

Will Crypto Market Aim For the Moon, After The Current Fall?

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Will Crypto Market Aim For the Moon, After The Current Fall?
  • Many cryptocurrencies hit record highs in April.
  • Few analysts believe this crash will eventually be overlooked.

With a new all-time high for Bitcoin, legislative discussions that may affect the sector, and more institutional buy-in from large businesses, the cryptocurrency market has gone through so much this year. Despite this, interest in Crypto has soared this year.

But the sector is young and growing. Long-term trends are difficult to forecast, but experts will focus on topics like regulation. Also, institutional crypto payment usage in the next months to better understand the industry.

This month’s crypto market collapse saw several major digital currencies decrease in value. Bitcoin, Ethereum, and other popular cryptocurrencies lost value in the recent market collapse.

Many cryptocurrencies hit record highs in April, with Bitcoin hitting over $50,000 before major falls during the summer.

According to Coinbase, Bitcoin’s value has increased 335.91 percent in the past year, despite the crypto collapses of May 19 and June 8. The total price is now far below the mid-April highs, but well over the same time last year.

In 2021, mainstream businesses across sectors showed interest in cryptocurrencies and blockchain. And some even invested. According to AMC, Bitcoin payments will be accepted before the end of this year. PayPal and Square, for example, are betting on Crypto by enabling consumers to purchase on their platforms.

The market wants to climb to the moon, according to Twitter Crypto Analyst and co-Founder of @PACcoinOfficial David Gokhshtein.

David’s Tweet:

Future of Crypto

Many analysts believe this crash will eventually be overlooked, and new highs will be made following the wide-adoption rate of Crypto in all sectors. 

NFT sales soared in August, according to the biggest platform for the burgeoning digital asset class, as investor’s wagered increasing interest in the arts, sports, and media. Many people, puzzled as to why so much money, spended on things that do not exist physically.

The demand and craze for the Crypto and increasing upgrades to DeFi. Along with nations starting to approve Crypto as a legal tender, shows the future of Crypto has a long way to go, and one can predict moon is not too far for the crypto market.

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TA: Bitcoin Revisits $45K, Why Dips Turn Attractive In Short-term

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Bitcoin

Bitcoin price extended its increase above the $44,000 level against the US Dollar. BTC traded close to $45,000 and it might correct lower in the short-term.

  • Bitcoin started a recovery wave above the $43,000 and $43,000 resistance levels.
  • The price is now trading above $44,000 and the 100 hourly simple moving average.
  • There is a key rising channel forming with support near $44,250 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could correct lower towards the $43,500 support zone and the 100 hourly SMA.

Bitcoin Price Extends Increase

Bitcoin price started a decent increase above the $43,000 level. BTC remained well bid and it managed to clear the $44,000 resistance level plus the 100 hourly simple moving average.

The price even climbed above the $44,500 level and traded close to the $45,000 level. A high is formed near $44,934 and the price is now correcting lower. There was a break below the $44,500 and $44,400 levels.

An immediate support is near the $44,300 level. There is also a key rising channel forming with support near $44,250 on the hourly chart of the BTC/USD pair. The pair is also well above the 23.6% Fib retracement level of the recent wave from the $39,580 swing low to $44,934 high.

Source: BTCUSD on TradingView.com

On the upside, an immediate resistance is near the $44,800 level. The first major resistance is near the $45,000 level. A clear break above the $44,800 and $45,000 levels could start another increase. The next major resistance is near the $46,200 zone, above which the price could rise towards the $47,000 resistance.

Dips Limited In BTC?

If bitcoin fails to clear the $45,000 resistance zone, it could start a fresh decline. An immediate support on the downside is near the $44,300 level.

The next major support is near the $44,250 zone and the channel trend line. A downside break below the channel support could lead the price towards the $43,500 support zone or the 100 hourly simple moving average. Any more losses could lead the price towards the 50% Fib retracement level of the recent wave from the $39,580 swing low to $44,934 high at $42,250.

Technical indicators:

Hourly MACD – The MACD is slowly losing pace in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is still above the 50 level.

Major Support Levels – $44,250, followed by $43,500.

Major Resistance Levels – $44,800, $45,000 and $46,200.

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Bitcoin.org Hacked By Scammers For A Few Minutes. Someone Sent Them 0.4 BTC

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Bitcoin.org hacked website

Hackers took over the Bitcoin.org website and displayed the classic double your money scam for a few minutes today. Apparently, it was a DNS hack. Luckily, the Bitcoin community took notice and alerted Cobra, the pseudonymous website owner, as well as the company that hosted the domain. A few minutes later, Bitcoin.org was down. Sadly, a credulous person was faster than them and sent 0.4 BTC to the displayed address… or did he?

The transaction exists, but there’s a rumor that it might’ve been the scammers themselves, trying to make the operation look reputable. Just like a busker who put some change in his hat to encourage others to contribute. However, that’s just a rumor. Someone might’ve been scammed.

Related Reading | Old Bitcoin Miner Proves Craig Wright has No Access to 145 Tulip Trust Addresses

In any case, everybody else should thank Matt Corallo, a Bitcoin Core contributor who took it upon himself to contact the domain name registrars and managed to convince them to temporarily take down the site before some catastrophe happened. 

What Does The Bitcoin.org Owner Think About All Of This?

When Cobra announced the Bitcoin.org hack, he or she said, “Currently looking into how the hackers put up the scam modal on the site.” So far, there’s no information on that. Cobra also said that Bitcoin.org “May be down for a few days,” but luckily that wasn’t necessary.

Earlier in the day, Cobra contacted via Twitter their new hosting company Cloudflare and told them that the website has never been hacked, and now that he moved to their servers, this happened. The company responded, and eventually, the original tweet disappeared.  

BTC price chart for 09/23/2021 on Bittrex | Source: BTC/USD on TradingView.com

Does This Have Anything To Do With Craig Wright AKA Faketoshi Nakamoto?

A few months ago, both Cobra and Bitcoin.org made worldwide news. Craig Wright, Australian entrepreneur and Satoshi Nakamoto cosplay artist, got a UK court to order the website to remove the Bitcoin Whitepaper from its servers. At the time, Yahoo! finance informed:

“Cobra, the pseudonymous creator of the Bitcoin.org website, has been ordered by London’s High Court to discontinue hosting its copy of the Bitcoin white paper.

Citing copyright infringement brought forward by nChain Chief Scientist Craig Wright, the judge had no option but to rule a default judgment because Cobra chose not to make an appearance.”

Does the hack have anything to do with Craig Wright? There’s not a single clue to indicate that, but, rumors are flying. He’s the only one incentivized to attack Bitcoin.org, they say. However, 0.4 BTC is a pretty great incentive. Maybe the scammers were just interested in scamming.

Related Reading | Craig Wright Wins Lawsuit On Bitcoin.org Hosting Bitcoin Whitepaper

In any case, to close all the loops, Yahoo quotes Cobra explaining why he chose not to make an appearance in court:

“Unfortunately the court rules allowed for me to be sued pseudonymously, however, I couldn’t defend myself pseudonymously. So I was put in an impossible situation of losing my privacy or losing the case in a default judgment.”

So, to sum it all up, Bitcoin.org is back up again and no one scammed you. All is well that ends well. 

Featured Image: Screenshoot from the hacked website | Charts by TradingView

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Bhutan Partners With Ripple to Deploy Central Bank Digital Currency (CBDC)

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Bhutan Partners With Ripple to Deploy Central Bank Digital Currency (CBDC)