Construction loans

[tlt23]

I hope I am posting in the right spot.

I am trying to do a new construction of a new home. I can use my VA, and some banks offer VA construction loans.

I am looking for a bank that does that, not a bank that will give me a construction loan and refi into a VA loan.

Any suggestions let me know. I keep running into the construction only banks.
Thanks.

 

[Ironbuilt]

Are you planning on rolling the construction loan into a mortgage after completion or just paying off the loan? If you're going to roll it over, you might want to take the bank loan and use the VA for the mortgage.

 

[tlt23]

No Im planning on selling my current home and paying off so I wont owe anyone anything.

 

[Ironbuilt]

No Im planning on selling my current home and paying off so I wont owe anyone anything.

Is the rate better from the VA? I know that most construction loans tend to have a pretty high APR, since they know that most people either pay them off or roll them over.

 

[PP1RT]

Juat stay away from Wells Fargo whatever you do!!

 

[Quantum53]

I did the same thing. I had already started the basement and no one wanted to talk to me. I was being punished for having started without a loan. Everyone wanted to finance from the footer up. I needed rom the plate up. The bank I'm with is BBT. I talked to a wonderful lady there who understood. She took all my info, looked at me and said, " I'm not giving you a construction loan. We are going to do a home equity loan. You'll use the money as you need it. When you sell your current house you pay of the HE and you're scot free" That is exactly what we did. After selling the house we were living in, we paid off the remainder of it and the HE and NO MORTGAGE! (just the wife's credit cards(Kohls, Christopher Banks).
Good Luck

 

[pushrod]

You can probably qualify for a bridge loan, that would become due when your current residence sells. I have had several clients that were in your situation and chose that option. If not, the home equity is a good option.

 

[747mopar]

When I built our home 15 years ago nobody would talk to me because I was building it myself so I ended up getting an equity loan using my property as collateral. Paid nothing but interest for the months while I was building then rolled it over into a morgage... been paid off for many years now.

 

[jason79]

The reason banks want to give you a construction loan at a higher rate is because of the high risk. If you default on a home loan, they take your house. If you default on a construction loan, they are stuck with half an unfinished house. That is why most banks require a general contractor to secure the loan. If the contractor wants his money he will finish the house. There is also a ton of paper work now with all the payouts, inspections, and lean waivers. It cost the banks a lot of money to process all the paperwork. I do not work for any bank, but I am a general contractor, so I kind of understand where the bank is coming from.

 

[tlt23]

This is so interesting. So if I started I should have a home equity loan if possible. They are a lower rate too. The current rate for a construction loan is 7%. Really too high for my blood. I just get mad that the banks are charging that much.

I am planning to do the whole house ICF and be the general contractor, so not sure what all the requirements will be to fund the loan.

What about the HELOC option? Has anyone done that?

 

[Michael.b95]

This is so interesting. So if I started I should have a home equity loan if possible. They are a lower rate too. The current rate for a construction loan is 7%. Really too high for my blood. I just get mad that the banks are charging that much.

I am planning to do the whole house ICF and be the general contractor, so not sure what all the requirements will be to fund the loan.

What about the HELOC option? Has anyone done that?

Helocs (home equity *lines of credit*) are great tools for consolidating high interest debt to help you get out of debt faster if used properly (as your only bank account), also a great way to buy assets such as real estate that would take most people literally a lifetime to save up the cash for.

 

[Michael.b95]

Juat stay away from Wells Fargo whatever you do!!

Left Wells Fargo years ago. Had several mortgages with them over the years. It's a corrupt business organization.

 

[Michael.b95]

BTW SBA has issued a new forgiveness application, Form 3508S. It is available for use if your loan was $50k or less.

 

[MCODECUDA]

We just built a house last year using a construction loan from BB&T and the rate wasn’t that bad. Once the house was close to being completed we listed our old house. We moved into our new house on 8/23 and closed on our old house on 8/30 and we paid off the construction loan in early September. Our timing couldn’t have been better.

 

[mrhemi]

My wife and I built our home with a line of credit secured by our existing home. A construction loan was not possible because of the type of construction (timber frame) and we were the contractors. Our bank was very helpful in setting this up. When the new house was completed to a certain point the line of credit was transferred to the new house.
A word of caution, something not mentioned to be very careful with, is insurance during the build, especially if you are your own contractor. We had difficulty obtaining a policy in the first place and then the company that accepted the policy cancelled it after 6 months because they felt a custom home should be completed in that time (more like cookie cutter builder's subdivision homes). This forced us to the commercial insurance market for 6 months, at 5 times the price.

 

[Michael.b95]

They denied me, left me with a hard inquiry for nothing. I’m on the verge of ruin. The problem is that roof repairs need to be addressed fairly quickly. Failure to take care of your roofing problem in a timely manner will lead to other problems that will end up costing me a lot more to resolve. My credit score is below the minimum and taking a loan when unemployed is not easy since lenders require proof of income from every borrower. I had no choice just to apply here paydayinusa DE, easy to understand, only with 3 steps you can get your funds, low rates and no faxing. But, you should only ever get one if you know for an absolute FACT that you'll be able to pay them back.