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hoosierbred

Construction Loan for Southern Indiana build

11 years ago

We are meeting with a loan originator of our local bank this afternoon to discuss scenarios of construction loans. This is our first bank to check out for rates and the first time we've ever done a construction loan. I've read through many threads posted here on construction loans and we want to make sure we ask the appropriate questions.

Background info: We will be using our son-in-law's family construction company for the build. We sent out for preliminary bids for the house and the pole barn in the fall of 2012 to get an idea of what the cost to build might be. We are fine-tuning our house plans and plan to send out final bids after we get a firm offer on our present home which is going on the market in March 2013. We own the new building lot (2-1/2 acres free and clear). I'm retired and my husband is planning on retiring at the end of March 2013. Our financial adviser suggested we meet with a financial institution now to make sure they would approve us with our retirement funding income. We presently live 3 hours north of where we will be building. When we sell our home, we will move down and live with our daughter and her family while we build. Our lot is adjoining to theirs.

Questions:
1. What's a good rate today for construction loans in Southern Indiana?
2. How many banks/credit unions should you check with before making decision? Do you actually fill out all the loan forms to be approved at each one?
3. We are going to ask the rates of construction loans and construction to permanent loans. Are there specific questions to ask about those in addition to fees involved?
4. We are meeting with Old National Bank today. They originated in Southern IN and we presently have our mortgage and checking account with them. Our daughter and her in-laws used German American Bank for their construction loans and mortgages two years ago. I also noticed several people on Gardenweb mentioned Farm Credit Services. Anyone have recommendations from any of these three?
4. How soon should you actually apply for the construction loan? I guess the obvious would be after you get final bids and have a building contract, right?

The loan originator sent us the loan application form along with a list of personal and financial information that was needed for the construction loan. We have filled out the loan application and will bring the other requested construction items with us even though they are not finalized.

Any advice or suggestions would be appreciated. Thank you in advance!

This post was edited by Hoosierbred on Thu, Jan 17, 13 at 7:47

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