I swear the rates for 30yr fixed mortgages are better than what I am being quoted for my construction to permanent loan rates. Rates are even better with my CU, but they don't do construction to perm loans. Does anybody know of a construction lender that covers north GA? I know I would have to pay 2 closing costs, but the interest savings alone is worth fronting a 2nd closing cost. Or am I going about this all wrong?
When i did the same thing back in 2001 the there was about a 2-3 point difference between the construction and perm loan. Don't remember there being two closing cost though. Went through lender the builder recommend and worked with. Nice thing it was like a line of credit that we had mile stones as when the builder would draw money as they were completed. That helped keep the cost down and the builder gave a discount for doing a construction loan so they could get paid as it was being built. We were also buying the land from the builder as well. Think of the construction loan as a short term loan and that is why the rates are usually higher.
I'm not as worried about the rates during the construction period since they are interest only. Its the rates of the permanent half(once the construction completes) that seem to be above market.
My permanent was pretty much in line with 30year rates at the time. Yeah i could have gotten a little better with a different lender but not more than half a point difference. If what they are quoting is out of line with what is out there for standard 30year I would shop it with different lenders.
Now I don't feel as bad b/c that is about what I am seeing. Unfortunately 0.5% is enough to take me from the high end of my budget to over budget. Guess I need to save a bit more first.
