I'm no expert but based on the fact that mortgage rates are currently at near historic lows and the government is pumping billions of dollars of new money into the economy (all those stimulus package bailouts), I think we're going to start seeing inflation VERY soon - double digit inflation in fact. If so, mortgage loan rates will rise with inflation. My personal suspicion is that your banker also foresees inflation coming and he doesn't want you to lock in today's low rates by getting a one-time close loan because such loans are very tough on the lenders. Your banker may look for the "best rate" available for you when your construction is done, but I strongly suspect that "best rate" won't be nearly as good as what you can lock in right now with a one-time close. Keep in mind that your loan is a business transaction for the bank. The bank wants to make money off of it and your banker has the bank's best interests at heart, not yours. As for possible over-runs in costs, if you're doing a "fixed price build", the only cost over-runs should be from "change orders" and I highly recommend paying for any and all change orders "out of pocket." That is one sure-fired way to keep yourself from going overboard on changes. LOL!

Also in San Antonio - have been told that Randolph-Brooks credit union is a good resource. We are not at the loan stage yet, so I haven't investigated. https://www.rbfcu.org/NB/html/RealEstate/Construction.htm

No, no, no; don't feel the number is artificial. Appraisals are each a judgement call, depending on numerous unseeables, from the house design to future development in the neighborhood. No two people [appraisers] are going to see the same thing in the same way. They are *guessing* what the finished project will look like, how it will fit [or not fit] into the neighborhood, and whether or not it will actually be worth anything close to their guess once it's completed. All guesses, but supported by their experience with similar projects. As t-mac-mo indicates, what you really want is an appraiser with the knowledge and experience to understand the finished value of your project in your location. Remember the basics: the bank will lend you money only if it is sure that --should anything happen to you-- they will be able to get the money back and still make a profit. If you build a home that costs $500K to build, and when finished would normally be valued at $750K, but want to put it in a neighborhood of houses valued at $500K, I can assure you that no sensible banker is going to loan you more than $400K because he will not expect the finished house to sell for more than its neighbor. (It will, but not by much and not for its perceived actual value.) Now, in that circumstance, the appraiser may guess that the finished house would appraise for $550K -- slightly more than the neighbors, and a lot less than its value in a different neighborhood, and only slightly more than the expected cost... and the bank isn't going to lend $550K because they really, really, want to be sure they make a profit which [from their vieiwpoint] can probably be made if they loan $400K.

The bank holds all the cards. And you have more than 2 weeks left.