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Construction loan to close time frame

2 years ago

Hello everyone how long was your construction with the underwriters before being approved to close? Have a unique property that im gonna be building on, which im having trouble finding someone to fund the build. Currently have the process going with a bank as the loan officer told us it wouldnt an issue so we submitted are app and now we are going on almost three weeks waiting on a word from the underwriter.

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Comments (5)

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Jeffrey R. Grenz, General Contractor
2 years ago
Ask the lender. Typically we get quoted about 6 weeks.
northernaz1991
Original Author
2 years ago
Thank you for the repsonse, I have reached out several times and cant get a straight answer from the loan officer. Initially said there was an issue with the property because there were two address for the same property, informed them the sedond address was created by the town just for 911 purposes so they would know where to go. since our porperty is zoned for a primary house and seperate guest house. the guest house is a modular home thats affixed to the property already an will be building the primary on the back portion of the lot. we are unable to split the loan due to zoning requirements size minium. when calling back asking for an update again he said it is more than just the second address issue which was a small portion that their construction loan is usually bare land for the house. So if the underwriter was going to deny it wouldnt they just say so straight from the gate rather than dragging on this long? or do you think they are to get it all worked out?
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Laura, So sorry you are having a tough time finding a CP loan. I do understand what you are going thru since we went thru very similarly hard time finding our CP loan. Next best advice is to lock into an ARM with the lowest possible fees and that will cost you the least in interest during construction, no matter what the final rate is. Then, figure out who you will be using to refi to a Fixed and have them help you keep a VERY close eye on the rate market. If they start to rapidly deteriorate, you can lock into a long lock period for a Fixed rate refinance ... you will go ahead and be underwritten and will close on the refi into a Fixed as soon as your construction is finished. This lender or broker needs to be someone who has access to Mortgage Baked Securities market that they can monitor the movement for you. Rate lock periods can generally be for up to 60 days. Some lenders will allow 90 day locks. Other lenders will allow even longer lock periods with an upfront fee. Keep in mind .. As a general rule, the longer your lock period, the worse the rate at the same origination cost. I.e. If you are paying 1% origination
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dan1888
2 years ago
When you're outside the lines their most used to things can take longer. If this option fails, what'll your next path forward? Possibly begin exploring that.
User
2 years ago
More cash cures all underwriting issues. If you can out down 70%, things will magically resolve themselves. Your described project is a very poor risk, for a notoriousky risk averse industry.
northernaz1991
Original Author
2 years ago
We have the route to go with a private lender but will cost a little more. Verbo what do you mean by poor risk? Like its a high risk and thats why maybe there histant? The land and everything including the modular is owned out right? and when the house is done we would have around 20-25% equity.

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