Quick Question for those who took construction loans..
Ok.. So we FINALLY have gotten back all the quotes from builders and now looking to finalize financing.. We got prequalified from two banks who prequalified us for more then double of what we need.. The question is.. Who do you go with.. I tried looking into banks in my area and only found two that said they did construction loans for those that were not businesses.. They were Wells Fargo and TD Bank.. After going through the prequalification and all that we broke down the differences as follows:
- Two closings - 1 for the construction loan and 1 for the mortgage.. This would mean we need to qualify twice and pay for two closings.. When asked about closing costs I was told that we would be "around" 10k and some of the initial closings costs "may" be able to be used towards the final closing
- Told us the current rate for a jumbo loan which would be the mortgage rate is 3.875% (that was actually a few weeks ago)
- Requires 20-25% upfront..
- Single Close - Closing costs would be approximately 11,500 plus costs for points
- Said current rate is 4.563% but could purchase points to lower.. Point costs were said to be in range of 3k-3.5k. First point would lower rate to 4.313%..
- Requires minimum 20% upfront
We are now at the stage of trying to finalize who we will be using for financing.. At this point would I just have them run the numbers for exact figures for the loan? Meaning have the numbers on paper for closing costs, all fees associated, construction rate, mortgage rate, etc? Or do I actually have to have them run the application and "apply" for the loan?
Lastly, has anyone found problems with banks that do two closings? I have read some bad stories about people going with banks with two closings and having problems with the second closing.. Basically the bank finances the construction but when it comes time for the second closing and to roll into mortgage "problems" arise and the bank wants more money down or flat out doesn't approve financing the mortgage.. I was reading of people basically on the verge of losing their newly built house to the bank because of this..