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#463744 - 03/07/19 01:27 PM when to move construction loan to mortgage loan
UncleT Offline
Junior Member

Registered: 03/07/19
Posts: 1
Loc: Alabama
Hoping someone can give me sound advice on moving from Construction Loan to regular Mortgage.

I have a home listed for sale that I owe nothing on. I am also finishing up building of my new home. My question is should I go ahead and move that construction loan over to a mortgage before my other home has sold? The bank where I have my construction loan is advising me to wait until my home sells, then pay off a large sum of the construction loan before rolling over to regular mortgage. The Interest is killing me though at a whopping $2k/month now that we have completed the build. My Realtor suggested getting a loan of some kind against the home I am selling and using that to pay down on the construction loan and go ahead and move the new home to a regular mortgage, and then once my old home sales, pay off the loan against it. My concern here is that I would have another closing cost and another payment to make and what if the house doesn't sale for a few months or more? Any thoughts or ideas much appreciated! Thanks!

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#463754 - 03/08/19 07:18 AM Re: when to move construction loan to mortgage loan [Re: UncleT]
Bigtoe Offline
Major Contributor

Registered: 10/14/07
Posts: 2351
Loc: Outer Banks
Time for a pro vs con list. Add up the cost of the construction loan vs the cost of switching. There is your answer.

Ask your agent to pull an average days on the market for your area and use that number for the time frame to sell. Be realistic with your agent as to whether you are priced to sell quickly or not. $2k a month adds up real quick.

You can always pay down the new loan once you sell your house.

Lenders are not usually good ones for advice.

Compare the new loan from the construction lender vs the cost with a different lender. You want to look at closing cost and not just interest rate. Closing fees can vary greatly from lender to lender.


Edited by Bigtoe (03/08/19 07:19 AM)
_________________________
Your Outer Banks real estate agent. Helping people buy and sell OBX real estate since 1989.

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