New Construction Loan (credit score, rate, banks, lender)

[SonorityGenius]

I am considering a new construction loan.. the terms are for a 2fam home with expected appraisal value of 770k -

Rate quoted to me was 4.125 which I found too high? But they are suggesting buying down rate at cost of 0.50% total purchase price for 0.125 rate reduction - total loan amount is 450k but if I pay down mtg it would drop to 400k

Any advice? Do you think this is a good rate considering its a very hard loan to obtain nowadays?

[SmartMoney]

Originally Posted by SonorityGenius

I am considering a new construction loan.. the terms are for a 2fam home with expected appraisal value of 770k -

Rate quoted to me was 4.125 which I found too high? But they are suggesting buying down rate at cost of 0.50% total purchase price for 0.125 rate reduction - total loan amount is 450k but if I pay down mtg it would drop to 400k

Any advice? Do you think this is a good rate considering its a very hard loan to obtain nowadays?

Is this a C-perm loan (after construction it goes directly to the permanent loan)? Is the lender letting you use future value or actual costs? How much down (and if your investment is the land, what is the value)? What is your credit score? How long do you have from start to completion?

Construction loans are among the most complex available and those are questions off the top of my head without going into capped rates, float downs, and modification into the permanent loan. These loans are not for the faint-hearted.

Opinion of rate depends on your answers.

[SonorityGenius]

Originally Posted by SmartMoney

Is this a C-perm loan (after construction it goes directly to the permanent loan)? Is the lender letting you use future value or actual costs? How much down (and if your investment is the land, what is the value)? What is your credit score? How long do you have from start to completion?

Construction loans are among the most complex available and those are questions off the top of my head without going into capped rates, float downs, and modification into the permanent loan. These loans are not for the faint-hearted.

Opinion of rate depends on your answers.

Hi SmartMoney thanks so much,

Yes its permanent 30 years fixed - they are allowing actual costs of 150k present mtg and 300k construction costs.. the only down payment would be any points I choose I believe.. excellent credit over 800, 12 months or until CO obtained

I agree construction loans are complex! I couldnt even find any big "known" banks to even talk to me about them!