MrsGordo is right on. I just got through going through that process. From my experience, hardly anyone does any 1-time construction permanent loans anymore. I called around to about 8-9 local banks and a few internet based mortgage companies and all of the internet based places said, "We don't do one-time close, your best bet is a local bank." Well, all of the local banks said they don't do that anymore. So, I had to go with a separate interim construction loan, at that point...its just shopping the different rates/closing costs. It varied so much. Some banks charge a point, but if you use them for permanent they credit that back to you. Some of them told me flat out, if they can't get the permanent they don't want to mess with the interim (Since they don't make very much off the interim). The bank I wound up using was referred to me by my builder. He uses them, and has referred other clients to them and never has heard anything negative. I wound up going with that bank, and it really worked out well for me. They had the best rate, no points (which allows me the option of shopping the permanent), and also they have a relationship with my builder already. So he knows what they need, and they know he does quality work and finishes on time and in budget. My interim construction loan also encompassed the purchase of the lot. So based upon my total loan amount, the amount I put down paid off the lot and put some in the balance of our building account. Now, if we can just get some DRY WEATHER Q#$(#$@#$!!, we can actually start and i'll start making draws and paying the interest. So, i'm not sure how it'll work with you buying the lot so far in advance of building. I would call around to some local banks and get some ideas from them. Make lots of notes on who you talked to, the rate, any points charged, application fees, etc so you can look back on the big picture and see who has the best overall terms for your situation.

We can afford our house now since we redesigned and cut some good square footage now that we are with a different builder...its just frustrating having to pay all those fees all over again and they don't help us continue to pay down the actual cost of the house. The $400 is the only figure he has told us thus far. The cost of our house is going up $20K which is pennies for some based on the cost of living, but that isn't for us. Loan officer originally said we had to have a certain percentage of the cost of the house down for the interim construction loan and we have worked hard to cover that but also have continued to put extra money down "just in case." I guess I thought that would be enough wiggle room. We'll just have to hope it isn't too much more! Sometimes I have to remind myself that as frustrating as this whole process has been, he is healthy as am I, we have a (rental) roof over our head because we were able to sell our old house, and our happy in our careers. Can't ask for much more. This post was edited by aimless07 on Wed, Aug 6, 14 at 9:36

Kec & Quirk, Lisonwal mentioned "$7,500 in closing costs"... but you need be aware of several things; Prepaid items (escrowed deposits for property taxes, and hazard insurance) add to the "cash required to close" but are not actual costs. The deposits they are replacing from the previous lender's servicing department are refunded generally within 3-6 weeks. NONETHELESS... many non-financial people look at their "bottom line" of their GFE and think "oh my God, that's "closing costs" ". NEXT; Lisonwal hasn't told what the buydown costs are for the interest rate they have locked. At a 5% coupon, depending on their loan-to-value, the loan size itself, their credit, and other factors, they may have a fairly sizable buydown included in their "closing costs." This is definitely not particularly a BAD thing, as it may have a breakeven point in their interest savings at a fairly short period. AGAIN; Taking a 30 FRM at "no points" or even "no costs" (when such a thing was actually available) is the MOST expensive money you can borrow, and hardly conservative in most cases. LASTLY; In the current mortgage meltdown environment, the back-end bond buyers are refusing to buy loans at enough of a mark-up for the lending banks to advance ALL the cash costs of the transaction itself. The bond buyers are offering a maximum of about 1.5% of a closed loan, while the actual costs run about 3-5%, with a cash minimum around $3,500+. Because of this the "no cost loans" of the past are... in the past. Folks who have sufficient equity to have their closing costs financed are still able to do so... but there are no "free" mortgages (beside the obvious TANSTAAFL reality.) Besides... lender-paid loans only made sense when rates still had the potential to drop lower... so taking the inflated higner interest rates that were offered in order to have the bank pay all the cash costs was something people would do on a speculative basis. No longer is it financially intelligent nor realistic to take a higher interest rate (simply in order to get it for "free") with the argument that you are saving yourself the ability to once again refinance when rates drop in the future. Cheers, Dave Donhoff Leverage Planner

Hi MNK, Let's start from the ending, where we both completely and thoroughly harmonize! Any financial planner will do what is best for the client based on their risk tolerance, time horizon and goals. All options are provided and the planner makes their recommendations. The client decides what is best for them. These are my personal views. AND I along with you! NOW let's break down the game film... most specifically addressing fallacies that are again repeated as "facts." (I'll leave the acknowledged "personal opinions" alone... as everyone has a right to their own opinion.) Leverage is utilized by people who have the means to pay off the debt at any time. While this is absolutely true... leverage is ALSO responsibly used, every day, by people prior to accumulating funds to replace the leverage entirely. Buying a home is a responsible use of leverage. Financing education can be a responsible use of leverage. Insuring income during family raising years can be a responsible use of leverage. ... and many other examples are easy to arrive at. "ALL" debt is not equal, nor is all debt bad nor evil. It may make sense for someone with $300k in cash to finance 80-100% for real estate in order to possibly generate a return greater than the mortgage. You advocate leveraging a monthly payment which is not the same. Microsofts acquisition of Yahoo is a good example. They can pay cash for Yahoo but believe they can generate better returns by using leverage. Most people on this forum do not have such means. Still you are taking RISKS. This paragraph makes no sense to me. If you can re-state it I can try to address it. "Keeping a mortgage (with a non-compounding interest rate) and instead maximizing alternative growth accounts (with compounding growth rates, and especially preferring tax-sheltered vehicles) is not only safer and more conservative, but reaches a secure retirement sooner as well." Again no consideration for RISK and VOLITALITY. Au contraire! Risk and volatility would absolutely be primary considerations in the selections and balancing of growth accounts. I am sorry that is ridiculous. To suggest that 100% financed real estate is the way to go is wrong. You may be sorry (and apology accepted,) yet you are spinning off on a tangent. I made no generic recommendation about 100% financing. I merely defined "a perfect hedge" against inflation. Look at those speculators and homeowners who used 100% financing and are now looking at foreclosure. They did not put any savings anyway and what is the benefit of leverage if you cannot pay it off. You're spinning off into anecdotal hinterlands again. While anyone can pull out references to failures (either specific or implied,) anyone can equally point to responsible successes. Further, falling back to an argument that "most people are too irresponsible/dumb/uneducated (add your own insult here) and therefore do not deserve to be made aware of more responsible choices" is a silly position to take at any community message board where people come PRECISELY to learn and grow. "Every dollar you entrap INTO your real estate equity (by surrendering your mortgage leverage) is a dollar you have double-exposed to the deteriorations of inflation." Yet you state that inflation benefits your real estate holding. Exactly! When you've entrapped your cash into your real estate, your cash neither grows nor provides protection. The underlying real estate itself responds to the inflationary pressures regardless of whether it houses your cash or not, so entrapping the cash is merely added risk of illiquidity and wasted growth opportunity. The RISK of losing your home to inability to pay a mortgage is gone. The RISK of losing your home is *ONLY* gone when you maintain enough liquid cash to replace it. There is no other way to completely cover that risk, period. I grant you that with inflation your fixed payment is decreased but so what, it is still a debt payment. Indeed, so what? It is a payment on defensive, conservative leverage that is a reducing burden at the rate of inflation. Even if you are investing in the stock market your real rate of return is decreased by taxes, commissions, mutual funds fees, etc. Obviously the stock market is a generally high-risk/high-opportunity selection for funds, and should be used only to the degree appropriate to a client's financial life stage (and not a dollar less, either.) You are not going to lose your home if your mortgage is gone. HAH... yeah, right. Tell it to Trent Lott (an easily Google-able example) and the thousands like him who lost their paid-in-full homes overnight in Katrina... had to live in miserable subsistence conditions with life completely interrupted and no liquid cash to fall back on... and had to endure long periods of protracted legal battles among the insurance companies (if they were fortunate enough to be sufficiently covered) to finally receive their claim funds. Ask them if they are happy they paid their mortgages off in full... or whether they'd left them fully leveraged for the insurance companies and the mortgage banks to fight over, instead of the individual's getting stuck int he middle. And lest ye accuse *ME* of anecdotal support... that list goes on & on & on... year after year after year... state by state by state... family after family after family. The risk is significantly reduced without a mortgage. Having no mortgage, all else equal, is riskier than having a full mortgage with an equivalent cash position. I could not find anything re: "SLAP" Me neither... darn the search funciton! The risks to equity are S.L.A.P. S.oftening or dropping market resale values, L.itigation exposures, A.cts of God (natural disasters beyond insurability of liquidity,) P.ersonal Disaster (family and health issues that create burdens beyond home management.) BACK TO AGREEMENT: Every family has their own profile, yet the principals of responsibly balanced finance will always apply. A professional advisor will recommend structural plans to fit the family's profile (hopefully setting aside the professional's own biases in favor of the client's best interests,) and ultimately the client must decide which path they choose to take... as it is ultimately their own life and future they will be creating. Cheers, Dave Donhoff Leverage Planner