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I am building with a reputable builder in North Texas and house is about to have brick and drywall installed in next 30 days.
Builder is saying I may have the house ready to close hopefully by end of October or November month. My previous home purchase was a spec home and it was ready to close in 30 days, so did not had this situation before.
1. Considering the construction delays and rates at a very low rate, is it wise to lock the interest rate now? If so, typically for how many days lock would not cause a rate impact?
2. Should I choose a lender who is local only?
3. If I get a stellar deal with an online mortgage company, is it recommended to use them for a new construction homes? I am planning to compare builder's lender with others.
I’m having a home built also. It’s a tract home versus custom. Not sure if the same would apply for custom built homes.
I was told by the lender that you would want to lock in the rate when construction starts. You can lock in rates for a number of days, which is called a hard lock. Then there is the lock with float down where you lock in a rate and if interest rates go down, you would get the lower rate. There is an additional fee for the float down option.
I think if you get the better rate with the online mortgage company then you should go for it. I would try to find one who specializes in new construction homes if you can. I went with the builders lender because they had a better rate and closing costs incentives. Plus, I just felt more comfortable since they work with the builders so they are all on the same page in the process, and I don’t want any surprises popping up when it’s time to close. One of the other lenders I was going to go with had no idea about new construction financing and the process. They hadn’t even heard of earnest money. I definitely didn’t want anyone unfamiliar with the process handling my loan. But that’s not to say online lenders wouldn’t do a good job handling your loan. Just do your research and go with whom you feel comfortable with.
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