Posted on: 14th May, 2009 10:53 am
I have a question in regard to by construction loan. My bank said that due to my loan to value was not 80% (loan amount was for $313,000. I owned the land outright for about 4 years before building. The final appraisal was for $395,000 and came in on the money, but the lender said it expired after a year and another full one was done about 3 weeks later and the house was appraised at $285,000 because there were no comps in my immediate area. My house was semi-custom. Because of that the lender said that they could not sell my loan to Freddie Mac or Fannie Mae and would have to hold it which is a risk for them. I was going for a 30 year fixed. My credit score is over 800. My debt to ratio is excellent, but I was only offered by them a 6.8% - 5 or 7% year adjustable rate. I planned on being there awhile. I am now trying to work with another lender. I had planned to do my end loan with this bank but now I have to find another lender. Were there other options beside an adjustable rate. This is in the Chicago area.
Hi byoung
If a different lender had offered you a better option, you should go with it. Apart from adjustable rate mortgage, you could have tried for a fixed rate mortgage as well. Thus, you could have received a fixed rate over the whole term of the loan.
Thanks.
If a different lender had offered you a better option, you should go with it. Apart from adjustable rate mortgage, you could have tried for a fixed rate mortgage as well. Thus, you could have received a fixed rate over the whole term of the loan.
Thanks.
I was going for the 30 year fixed, which originally that was to happen, but after the bank received the full appraisal they said that unless I came up with the money to make the difference of the LTV, that was my only option which I refused to believe. I told them this is the mess that people are in now with the foreclosures which is why I went looking for another lender.
by all means, shop to find a different lender who might be able to accommodate that elevated ltv with a more reasonable rate.
