By Rob Greenbaum, Vice President of Sales with AAFMAA Mortgage Services LLC (AMS)
If you plan on building a house, you’ll want to choose your contractor(s) carefully. After all, your home is a large investment, and the last thing you want is to have poor workmanship, cost overruns, or an unfinished house.
With that in mind, here are five steps to help you hire reputable contractors, whether for home repair projects or to help build your dream home.
- Get Multiple Bids
Be sure to speak with several contractors who specialize in the kind of work you’re looking for and get at least three written estimates. When you compare estimates, look beyond price to compare quality of the building materials, work methods, and timelines. Be cautious of estimates that seem too high or too low and ask questions about anything you’re not sure about. You’ll want to hire a contractor who communicates well with you — so if there are signs of non-responsiveness early on, look elsewhere.
- Hire Local When Possible
Local contractors should be easier to contact before, during, and after your project, and may be more familiar with local building codes or HOA restrictions. Ask for a physical address and references, so you can inquire about the quality of their products, their workmanship, and if the customer would hire them again. It’s a good idea to check with the Better Business Bureau too. BBB has a scam tracker on its website to help you spot scammers and file a report.
- Check Credentials
It’s important to make sure a contractor’s credentials are in order, including licenses, bonding, insurance, and references. You’ll want to make sure they have insurance for damage to your property and injury to any of their workers who are hurt on your property. The contractor’s certificate of insurance should provide the name of the insurance company, policy number, and the policy limits. It’s a good idea to contact the insurance company directly to ensure the policy is in effect and to verify coverage.
If a contractor says you need to sign immediately, watch out. Read the fine print on all estimates and contracts. Take your time and do your due diligence. Even if you’re recovering from an emergency and don’t have time to thoroughly research a contractor, ask neighbors, family, or friends to see if they have had a good experience with an emergency services contractor. Don’t pay in advance or in cash. And don’t pay in full until the project is complete and you’ve done your final inspection. Plus, if the contractor used subcontractors, ask for signed documentation showing that the contractor paid them in full, according to HomeAdvisor.
A written contract signed by both parties should outline the project including its start and estimated end date, cost, and payment milestones. The contract should outline all guarantees — what they guarantee, who is responsible for the guarantee, and how long the guarantee is valid. All parties should acknowledge contract changes in writing, says HomeAdvisor. Keep everything about the project in a file because, after all, you never think you’re going to have a problem until you do.
We’re Here to Help
If you’re ready to build your dream home, but don’t know how to finance it, let AAFMAA Mortgage Services LLC (AMS) and our Military Mortgage Advisors help you get the loan you need to start construction. Current or former U.S. military servicemembers with qualified credit and minimum 680 FICO (credit score) can qualify for our Construction Advantage loan.
With the AMS Construction Advantage loan, we pay the builder based on completion of progress with inspections at every draw stage of the loan. This ensures the work is being completed on-time and according to building standards.
We offer flexible terms and competitive rates on loan amounts of $200,000 or more, and up to seven draws to pay as construction is completed. Then once your home is completed, AMS will help you get a traditional mortgage from a wide range of options, including VA Home Loans, FHA, USDA, and conventional loan products.
Call us at 844-422-3633 or contact us today for current rates and additional details.