Builder’s Profile



1-Close Construction & Renovation Application Disclosure

1. Application Requirements: The following construction-related documents will be required at application: (a) proof of payment of builder deposit, (b) set of plans and specifications, (c) copy of executed construction contract, (d) copy of land contract or deed and settlement statement for land purchase and (e) initial loan disbursement schedule request.

2. Rate, Points & Term: Your interest rate (i.e. Note Rate) is derived from the market rate for the permanent loan plus a premium based on the term selected. Rates and fees are subject to change daily and are published within M&T’s daily mortgage rate sheets. During the construction period, outstanding draws will be billed interest-only based on the Note Rate. Upon expiration of the construction period and completion of construction, the loan will automatically convert to a fully amortizing term loan at the Note Rate. You must select a construction term that expires on or after the date of expiration of your contract with your builder.

3. Commitment: You must be under contract with an M&T Bank registered builder prior to the issuance of a commitment letter. The terms for the draw schedule must be agreed to prior to closing with the execution of the Construction Loan Disbursement Schedule by the builder. Any unused funds at final draw are not disbursed.

4. Closing Requirements: The following construction-related documents will be required at closing: (a) Land/Site Survey in the event the lot has not yet been assigned a Tax ID number by the local municipality, (b) Foundation/Location Survey in the event a foundation draw is being made at closing (otherwise a Foundation/Location Survey is required prior to the post-closing foundation disbursement) and (c) Construction Loan Agreement (including the final agreed-upon disbursement schedule) signed by you. In addition, a building permit will be required at closing if an initial disbursement for improvements is being made. Otherwise, a building permit is required prior to the first post-closing disbursement.

5. Tax and Insurance Escrows:

• Prepaid tax and hazard insurance deposit at closing – An upfront escrow deposit for taxes and hazard insurance will not be collected.

• Taxes and hazard insurance payments during construction period - You are responsible for payment of taxes and hazard insurance during construction/renovation. Therefore, there will be no monthly escrow payments set up for taxes and hazard insurance during the construction/renovation phase even if the permanent phase has monthly escrow payments for these items. The builder may provide the hazard policy during construction in the form of a builder’s risk policy. If not provided by the builder during construction, the hazard policy must contain a builder’s risk or construction perils rider.

• Taxes and hazard insurance payments after construction period - If your loan will be escrowed for taxes and/or hazard insurance, M&T will assume responsibility of the payment of taxes and hazard insurance after conversion to permanent financing. This policy does not apply if the borrower qualifies for and has opted for an escrow waiver.

o Periodic escrow payments - Your monthly payment during the permanent phase of your loan will include the amounts necessary to make these payments.

o Escrow deposit – You will be required to make a deposit into your escrow account when construction is complete in order to avoid an escrow shortage when a tax and/or insurance bill comes due. There will be an increase in your property taxes when your property is reassessed and THE INCREASE IN YOUR PROPERTY TAXES IS LIKELY TO BE SUBSTANTIAL because your property’s assessment will significantly increase as a result of the increased value of the improvements on the property once construction is complete.

• Private mortgage insurance - If private mortgage insurance is required, your monthly payment during the permanent phase of your loan will include the private mortgage insurance premiums. You will not pay monthly premiums for private mortgage insurance during your construction phase.

• Flood insurance - If flood insurance is required, the loan will be escrowed for flood insurance during the life of the loan including the construction phase.

6. Construction Commencement: Construction must begin within thirty (30) days after the date of the loan closing. Should construction fail to begin within this time frame, you will be in default and M&T Bank will have all the rights and remedies as outlined in the Construction Loan Agreement, Note, Security Instrument and other Loan documents.

7. Receipt of Draw Funds: Three (3) days after closing, you will receive a Welcome Kit from M&T’s Draw Administration team. This Welcome Kit will have important information necessary to request future draws and most importantly, the name and contact information of your Draw Administrator. NOTE: All requests for payments (i.e. modular unit/log package) at the time of delivery to the job site will require a minimum of 14 days advance notice to ensure timely receipt of funds.

8. Interest Billing: You will pay interest only every month on the amount of funds advanced, from time to time. The monthly payment due for loans closed on the first day of a month will be due the first of the following month. The monthly payment due for loans closed on any other day of the month other than the first will be due the first day of the second month following the closing. You will receive interest statements each month for interest due based on the ending principal balance for the prior month. All payments are due on the 1st of the following month after the interest statement is received. A late charge as indicated on your Note will be charged for any loan payment received more than fifteen (15) days after the due date. There is no prepayment penalty.

9. Amount of Monthly Payment During Construction: As noted in Section 2 above, you will pay interest-only on the outstanding amount of monies advanced during construction (“Year 1”) based on your construction loan rate. Please note that this amount will differ from the amount disclosed within both your Loan Estimate (LE) and Closing Disclosure (CD). Your actual payment may be more or less. The payment disclosed in your LE and CD documents for illustration purposes is calculated based on the assumption that 50% of your loan is disbursed at all times in Year 1.

10. Final Advance & Rollover: When your property is completed on time and M&T has received a final inspection, evidence of clear title and a Certificate of Occupancy, and all outstanding monthly payments have been paid, your loan will automatically roll into the permanent phase at the conclusion of your construction period. Any unused draw funds are not disbursed. Any unpaid fees and charges will be netted from your final draw as outlined in the Loan Disbursement Schedule. Approximately 5-7 business days prior to the expiration of your construction period, you will receive the Rollover Confirmation of Permanent Loan Terms document. This document will indicate any interest due, your first payment date, permanent loan interest rate (pending floatdown eligibility), current principal balance and periodic payment amount. Your permanent loan interest rate, current principal balance and periodic payment amount will not exceed what appears in your Note.

11. Extensions: All construction must be complete and the final draw disbursed within the selected construction period term. If the construction is not complete and all conditions of the Construction Loan Agreement are not satisfied within the required time frame, you are in default and M&T may invoke any of the rights or remedies provided in the Construction Loan Agreement, may accelerate the amount secured by the Security Instrument and invoke the remedies contained in the Security Instrument or Note. M&T may decide to grant an extension and modify the loan. Extensions of the construction period after the loan has closed may be granted at M&T’s sole discretion for a market-based point charge based on the loan amount as determined by M&T.

12. First Fully Amortizing Amount Due: Your first fully amortizing loan payment will be due on the first day of the second month following your construction loan rollover to the fully amortizing period of your loan.

I have read and agree to the above-outlined program parameters for M&T’s 1-Close Construction & Renovation Program.

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Borrower Co-Borrower

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