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Reply to "Construction loan financing question - amount of down payment required"
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[quote=Anonymous]00:30 here it is still a work in progress so I haven't chosen a final lender yet. I am working with Sandy Spring right now because of the ability to do an 80-10-10, but the 2nd mortgage is at a decently higher rate; and because EVERY bank will do a construction-to-permanent loan at 80% LTV I can shop for the lowest interest rates and best terms. So I will most likely just put down 20-30% plus closing and do a single loan. As far as the house goes we're still in the design phase; once that's done we can settle on a final price, and begin the permitting process. Once we're ready to break ground we'll close on the construction loan and move forward from there. If you can pay out of pocket for everything through the permitting process then you can push closing on the construction loan until after you've gotten all of your permits and you're ready to build. Else, you could end up paying interest on the balance of construction loan while your permits sit in the District or County offices. Also, you typically have only a year to convert your construction loan to a permanent loan so if you want to build a McMansion (I'm probably the only person on the board that likes the idea of living in a new, spacious, energy-efficient home that's inside the beltway :-) ) and your new neighbors cause a big ruckus and slow, or stop, your permits from being granted then you can take your time and work through all the issues without worrying that your construction loan will expire. So we'll pick a lender a little later. Just my 3 cents. Good Luck![/quote]
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