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How woukd cost plus work with a construction loan?
Posted on 11/17/15 at 8:01 pm
Posted on 11/17/15 at 8:01 pm
(no message)
Posted on 11/17/15 at 8:12 pm to Franktowntiger7
The loan will need to give your plans to an appraiser and he will give it an initial appraised value. Usually, there is a difference in cost and value, most require a minimum of 10%. Meaning if the house appraises for $100, then you can borrow $90 to build it. Some require you to own the land, some have other considerations. If you are doing a FNMA/FHlMC one time close, then they may allow more.
If you are doing cost plus, I would essentially get a construction and then do a permanent. Less restrictions. It will depend more on your lender. If you need more money, then you may have an issue. I would be wary about that situation if you have little equity, you may end up out of pocket and won't have any money furnish, move in, etc.
If you are doing cost plus, I would essentially get a construction and then do a permanent. Less restrictions. It will depend more on your lender. If you need more money, then you may have an issue. I would be wary about that situation if you have little equity, you may end up out of pocket and won't have any money furnish, move in, etc.
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