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Who is providing construction loans to build first home?
4 Comments · Posted by admin in construction loans
I’ve been approved for a mortgage loan but need a construction loan to build a home.
In Texas. Great fica score 840 or higher. Have enough money in the bank. Have tried builder contact, waiting since month ago. A big lending company on-line bluntly told me that he didn’t know of any bank that was offering construction loans because of the way things are with the economy right now?
what Col Kurtz didn’t mention is that when you pay retail to a direct lender you end up with a higher rate and the lender gets more on the back end then a broker would, it’s called SRP or service release premium.
Here’s another little fact/difference.
The brokers yield spread premium has to be disclosed on the HUD1 settlement statement but the bank does not have to disclose their premium.
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Paul in San Diego · March 8, 2010 at 1:44 am
You could contact the builder and ask if they have any contacts for construction loans. Or, you could get ahold of a mortgage broker. They get rate sheets from many different loan companies for different loan products every day, including construction loans. The advantage of going through a mortgage broke is that you only apply through them once and they find the lender with the best terms for you.
References :
Help needed · March 8, 2010 at 2:11 am
For which State?
References :
Mortgage Broker-TX
col. Kurtz · March 8, 2010 at 2:41 am
I would stay away from Mtg Brokers. When they do "shop" your loan file around, what they are shopping for is the Loan Funder that will give the MB the biggest "reward" for bringing your file to them.
Try looking on-line for Direct Lenders you’ll prolly pay "Retail" price for originating that loan but at least you’ll know that some slimey, sleaze-ball MB is not yukking it up w/his pals in the ofc about how big a "rebate" they got for sticking it to you!
I suspect in today’s Mtg climate that type of loan is very costly due to the inherant risk. You’ll prolly need 800 FICO (credit score) a ton of reserves (cash in bank) and the "Finished product" better have plenty of equity once complete! Again, minimizing risk for the bank/Lender.
References :
MB’s are like the Health Ins Industry, the more they screw you the bigger their Year End Bonus!!
Noneya · March 8, 2010 at 3:05 am
what Col Kurtz didn’t mention is that when you pay retail to a direct lender you end up with a higher rate and the lender gets more on the back end then a broker would, it’s called SRP or service release premium.
Here’s another little fact/difference.
The brokers yield spread premium has to be disclosed on the HUD1 settlement statement but the bank does not have to disclose their premium.
References :
I’m a mortgage banker/broker