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Answers (5)
- wayne lancaster, "funds2"
- Contributions:1177
It concerns me that you are asking about permanent financing when you have started a construction loan. It is common to obtain a commitment for permanent financing at the same time you are arranging construction financing. It would be unusual for a construction lender not to have that commitment before they would grant and begin construction.. Hopefully your land equity is sufficient for down payment required for any permanent financing.
I would strongly suggest you contact Clay Branch, a GA lender who is very knowledgeable and is a frequent Zillow contributor. cbranch.afm@gmail.com . His advice could be extremely helpful & timely.
I would strongly suggest you contact Clay Branch, a GA lender who is very knowledgeable and is a frequent Zillow contributor. cbranch.afm@gmail.com . His advice could be extremely helpful & timely.
- floyd605
- Contributions:3
Ok, thank you guys. That makes me feel much better. We do have a construction loan in place. I was unclear of the process. Approval is a one-step process instead of a two-step process. We are approved for the perm mortgage when we are approved for the construction loan. We have set in place a secured loan for the gap, if there is one after the postconstruction appraisal. I am hoping for an appraisal that comes back at $90/sqft, so we won't have to use the secured loan at all. FWIW, I'm an expert at asking odd questions when it comes to financing...Ha ha!
- Steven G. Hinton
- Contributions:98
Your questions is a little odd. If you don't have savings how are you paying for construction? If you have a construction loan in place, that indicates you have enough potential equity that an investor should be available when it is time for your loan to convert to your take out loan (long term financing). Otherwise the construction lender wouldn't make the loan. The $270,000 construction cost with a $270,000 completed value would indicate that you won't find a construction lender. Construction lenders tend to be very conservative and want a substantial amount of equity or they won't lend on a project.Whether someone puchases your loan on the secondary market really doesn't have any impact on you.
- floyd605
- Contributions:3
Ok. Bear with me because I don't know as much about this as I'd like to. Not worried about refinancing. The perm mortgage is what I'm concerned with after construction is complete. My lender says that the secondary market will determine whether we can finance $270K or have to "secure the gap" with our automobiles. The gap, of course, being the difference between the appraised value after construction and the 80% we're allowed to borrow. I'm probably making no sense...LOL!
- Ken Cook, "KenCook"
- Contributions:17
Hello Floyd. I'm not certain why you are concerned with what a mortgage investor will do on the secondary market so just to answer briefly there are important dates as well as values to consider. The most important date is the date you receive your Certificate of Occupancy. My guess is you are concerned with being able to receive a cash out (equity leverage) refinance. In our case you would need 1 year of seasoning from the date you receive your CO.
Disclosure required by law when giving mortgage advice: AmericaHomeKey, Inc. 2300 Windy Ridge Parkway, Atlanta GA 30339. Georgia residential mortgage licensee #23191. NMLS ID 15076. Equal housing lender. Subject to errors, omissions and changes. Loans subject to approval. [Contact info deleted by moderator]
Disclosure required by law when giving mortgage advice: AmericaHomeKey, Inc. 2300 Windy Ridge Parkway, Atlanta GA 30339. Georgia residential mortgage licensee #23191. NMLS ID 15076. Equal housing lender. Subject to errors, omissions and changes. Loans subject to approval. [Contact info deleted by moderator]
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