Given some unusual circumstances, I started to talk to bankers about a mortgage early in the process. We are buying a home under construction. The builder is customizing the house for us and we are under contract, but we did NOT take out a construction loan. Given COVID has interrupted some of the building processes, we do not have a firm settlement date.

Last week, my local bank sent us a disclosure doc with a LOCKED rate for a conventional 30 year mortgage at a competitive interest rate and 0 points that it will guarantee for 60 days. I‘m going to compare rates again, but from what I’ve seen, this rate is probably as good as it gets and the origination fee is under $1000. If we accept, we have to pay for credit checks (about $40) and a home appraisal (about $800) now.

We know that there is NO WAY that our new home will be done within 60 days — we don’t know when the kitchen manufacturer will re-open and when it does, our cabinets will take at least 8 weeks to build (lots of custom features). After that, there’s still more work to be done (Countertop fabrication and install, etc). When I pressed, the mortgage guy said (in a separate e-mail, not in the loan guarantee itself) they could extend the lock another 30 days without a charge, “if necessary.“ Given the uncertainty in the timing of the completion of the house, I’m concerned this bank is putting too much pressure on us to sign the ”intent” and accept the locked rate.

I think I can get the same rate at Navy Federal with O points and they have no origination fee at all. However, Navy Fed will only do a 60 day lock so I didn’t start filling out an application there yet.

I‘d appreciate advice on how to deal with this.

Should I submit the “intent to go forward” doc with the local bank with a 90 day lock (if the local bank puts this term formally in the loan dock);

demand a float; or

run?

Thanks