Mortgage advice... Cash out refi or conventional loan?
I have been shopping around for rates since we are about 45 days out from closing on our house. I was under the impression based on input from several lenders that we would need to do a cash out refinance since we don't currently have a loan on the land and the builder is financing the build himself. My dad is building our home and had a line of credit that beat any construction loan rates around, so he is financing through the build. We are paying him at closing with the money we borrow and with some cash.
Between the land, which we own outright, our cash reserves and the appraisal value of the house, we will be borrowing less than 70% of value.
I should add that qualifying is not an issue based on credit score or income, so that is not affecting the quotes from different lenders.
One loan lender is telling me that we could get a conventional loan and it is 1/4% lower than other rates. I also have to escrow with this lender, which I don't particularly care to do. Should I trust him or go with another lender and the cash out refinance? I thought I understood this all, then someone tells me something different. Please let me know if you have any experience or knowledge that can help!