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mortgage to build a house from ground up too late?

Ede Gorb
last month

We're about to embark on this house building journey, but I am somewhat VERY hesitant to actually begin this year. The reason is the crazy mortgage rates atm, inflation and absurd building cost.

The background.

We own the land outright, got an initial quote from a reputable builder and are days from signing a potential mortgage agreement at a interest quote, which is about to change upwards by a couple of basis points next week.

The house build is quoted at 650K for a 2600sqft basic house as mentioned by the builder (which I think is already preposterous), the mortgage interest is at 5.20% atm and possibly going up to 6%. The bank will not give us the mortgage directly, and for the first year we have to apply for a construction loan, which is 25K out the window, before the bank maybe overtakes the loan and converts it into a mortgage (25 years, $3500 a month for a total interest of between 450K-513K before all the other related cost.).

So we're building a 650K house, the total cost will be well over a million, property taxes are then about 6K a year and every financial party keeps stating: "It's an investment into your future".

At these rates and prices, it seems like a fools errand to me.

Would love your opinions

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