Four Questions about Loans and the Secondary Market
Question #1: We are within 60 days (hopefully) of completion of our new house. Up to this point we have had a line of credit with our bank that has been covered by other assets. We are now going to have to get a construction loan to cover us until completion when we can get our actual loan. We have been told by the bank that the secondary market (with a rate of 4.5%) requires the home to be completely finished before we can get a loan with them. That means we will be getting a construction loan for 60 or so days. Attorney fees and bank fees for the construction load will be around $1,000. The bank tells us that if we go through them for the secondary loan they will forgo the $500 fee to help us with the secondary loan and that the secondary company will work with the same lawyer to update the account records so the fee for the secondary loan will be greatly decreased. Are we going in the right direction and do you think this is the way to continue?
Question #2: Will it be best for us to go through out local bank to get a secondary market loan? Why or Why not?
Question #3: We want to pay additional money down on our loan when we are able to sell the home we are currently living in (we have not placed the home on the market yet). Are there any details in secondary market loans that we should look for that would prevent us from making a larger payment on the loan hopefully months down the road? Are there any other contract items that we should be concerned with on the secondary market or items that we should look?
Question #4: This will be the first home we have ever financed and this will be the first home we have ever sold. My brother, sister and I sold the house we inherited from my mother two years ago. Was that considered the first house I have sold or will the home I am living in now be considered the first house I have sold? Does it matter?
Thanks, this is our first home loan and we really hope to get it right!