Free download, click here - Natural Life Network

Chapter 19FINANCINGHaving bought the property with a vendor-take-back mortgage we thought we werewell on our way to financing the construction of our new home. The money wesaved during the four years in our Mississauga town home left us withapproximately $100,000 in cash after we sold the house. Our construction budgetwas based on an estimated construction cost of $100 per square foot. We hadoriginally hoped to build the home at under 2,500 square feet. The property coststotaled $130,000 plus $250,000 in construction meant a total budget of about$380,000. Adding in solar and wind power brought the total to about $400,000. Inthe end, by the time we finished the designs for the home, we were at 3,500 squarefeet. So, our total building budget ended up at $450,000.One of the first surprises that just about stopped everything was the requirement ofowning the land outright before being able to finance the construction. We hadnot known this until well into the final stages of getting our building mortg agearranged. Our bank, one of the big five here in Canada, was getting out of thebuilding mortgage business just as we were trying to arrange for this type offinancing. Fortunately we were able to get in under the wire. In addition to gettingour bank to provide the building mortgage we had to get Canada Mortgage andHousing Corporation (CMHC) to insure the mortgage since it was for more than75% of the value of the home and included non-conventional construction. Thisadded thousands extra to the overall costs.Compounding our cash flow problems was the need to complete constructionbefore being able to make a draw from the building mortgage funds. In order to getto these payments we had to le verage every credit card we could get our hands on,plus increase our line of credit, and then finally borrow money from family.The only other problem was going over budget on some of the construction costs.Our zinc roofing, the windows, a very deep well (250 feet) and of course the septic216