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Started By
Message
Construction loan questions?
Posted on 4/8/15 at 3:19 pm
Posted on 4/8/15 at 3:19 pm
(no message)
This post was edited on 6/26/17 at 8:21 am
5
Posted on 4/8/15 at 3:35 pm to man117
Just got quoted 3.625 on construction to permanent 15 year at Renasant Bank (MS). 15% down as well.
They are a mid-size bank with about 35 branches. Don't know what the Louisiana equal is.
They are a mid-size bank with about 35 branches. Don't know what the Louisiana equal is.
Posted on 4/8/15 at 3:51 pm to anc
Look at Iberia or Gulf Coast Bank. I think they both do 80% loan to value on appraised final value and not on construction cost so there is nothing down.
Posted on 4/8/15 at 3:54 pm to anc
Try gulf coast bank and trust , nola lending, Iberia bank, and Midsouth bank.
I'm basically in the same boat. I don't know what area of La you trying to get a construction loan but those were places recommended to me.
We own the land, so what I've been told is that the land will roll into the construction loan as equity or down payment since we paid cash for it. So essentially the 300k we want to spend total I would only be getting a loan for 240k. The above statment is very generalized so i might not have explained it that great.
Most construction loans will require a general contractor.
I'm basically in the same boat. I don't know what area of La you trying to get a construction loan but those were places recommended to me.
We own the land, so what I've been told is that the land will roll into the construction loan as equity or down payment since we paid cash for it. So essentially the 300k we want to spend total I would only be getting a loan for 240k. The above statment is very generalized so i might not have explained it that great.
Most construction loans will require a general contractor.
Posted on 4/8/15 at 4:03 pm to HamCandy
Forget the big guys for construction loans: go to your locally owned, smaller banks. They're much easier to deal with & have far more latitude in their lending decisions.
Lot will serve as security for the loan, provided it's at least 20% of estimated final value.
Lot will serve as security for the loan, provided it's at least 20% of estimated final value.
Posted on 4/8/15 at 4:21 pm to hungryone
(no message)
This post was edited on 6/26/17 at 8:22 am
Posted on 4/8/15 at 4:46 pm to man117
quote:
I paid 28k for the lot. Similar lots in the subdivision are probably around 40-43k now. If I had to guess, the house would probably appraise for 330-340k while costing about 300k to build.
So if I understand correctly, if the bank loans 80% of appraisal (264k), I would need to come up with the other 36k to build.
Do institutions commonly only do 80% of construction cost or is it safe for me to assume I can get 80% of appraisal?
80% of appraisal, not of construction costs. With the numbers you post, I'd be concerned about price per square foot as compared to other houses in the subdivision. Don't wanna be the $200/sq ft house in a neighborhood of $110/sq ft.
Posted on 4/8/15 at 5:03 pm to hungryone
(no message)
This post was edited on 6/26/17 at 8:22 am
Posted on 4/8/15 at 7:47 pm to man117
5 years ago, Bancorp South handled both with a one time close and they matched local rates for both
Posted on 4/8/15 at 8:00 pm to man117
Fifth District Savings Bank has the best construction loan program in the state. They've been around since 1928 and are the largest Louisiana based federally chartered homestead.
1 closing, interest only during construction then fully amortizing payments, lowest closing costs anywhere we found and they'll let you use your land as equity. No cash at closing was great if you already own the land.
We just went through it and it was do much easier than the standard process with 2 closings and hassle. Closing costs are low because you have use their lawyer and building inspector. I recommend them to everyone I can because it was so painless.
LINK
1 closing, interest only during construction then fully amortizing payments, lowest closing costs anywhere we found and they'll let you use your land as equity. No cash at closing was great if you already own the land.
We just went through it and it was do much easier than the standard process with 2 closings and hassle. Closing costs are low because you have use their lawyer and building inspector. I recommend them to everyone I can because it was so painless.
LINK
This post was edited on 4/8/15 at 8:03 pm
Posted on 4/9/15 at 7:38 am to GoIrish02
quote:
GoIrish02
Do you need to have an account / be a member do to a construction loan with them?
What kind of term / rate did you get?
Posted on 4/9/15 at 8:55 am to man117
We used Whitney bank last year. 90% Loan to Value is what they were willing to loan for the construction. What that meant is if the house and land together appraised for say $500k then they'd loan us up to 450k total(including the land which isn't a problem for you being that you own it) However that kind of answers your #2. Basically your lot factors in to how much you can potentially borrow.
It was a one time close loan at 4% during construction and then modified to whatever the competitive rate was. Rate ended up being 3.75% for 30 years which was good enough for me.
It was a one time close loan at 4% during construction and then modified to whatever the competitive rate was. Rate ended up being 3.75% for 30 years which was good enough for me.
Posted on 4/9/15 at 11:17 am to BeerMoney
quote:
We used Whitney
We're using them now for their lot loan/construction loan/30 year loan product, and we've been pleased with the process so far. The lot loan rate is reasonable and we will be paying interest only until we close on the construction loan. The construction loan/30 year conversion are all handled with one closing fee.
Posted on 4/9/15 at 11:23 am to Maderan
Chris Lebato at Iberia in New Orleans is fantastic.
We recently closed a Construction loan with him, 4.75% during the construction, 3.75% 7-year ballon after construction finishes, 30 year amortization. Low fees, etc.
We recently closed a Construction loan with him, 4.75% during the construction, 3.75% 7-year ballon after construction finishes, 30 year amortization. Low fees, etc.
Posted on 4/9/15 at 11:50 am to Rev1897
(no message)
This post was edited on 6/26/17 at 8:22 am
Posted on 4/9/15 at 12:52 pm to BeerMoney
quote:
BeerMoney
quote:
SetTheMood
Does Whitney require that you used a licensed GC/builder or can you act as the GC?
TIA.
Posted on 4/9/15 at 1:01 pm to man117
While I'm not in your area, I did just finish building. Got 3.5%, 30 year, with 30% down from a local bank. State Bank and Trust. Got lucky and caught interest rates low as they've ever been when I locked in.
Posted on 4/9/15 at 1:43 pm to Ziggy
I think acting as your own GC changes what % they're willing to lend you. There are probably other conditions. I only asked about it briefly and the % alone was enough for me to say nah. We used a builder.
Posted on 4/9/15 at 1:49 pm to BeerMoney
quote:
I think acting as your own GC changes what % they're willing to lend you. There are probably other conditions. I only asked about it briefly and the % alone was enough for me to say nah. We used a builder.
Gotcha. Thanks for the reply.
Posted on 4/9/15 at 4:25 pm to Ziggy
No, anyone can apply. I used to have a savings account there when I was a kid and we discovered it had about $26 in it when we applied, after about 17 years or so of compounding.
Rate was 4%, fixed throughout, closing costs are about $750, no origination fees. Looking at other banks process and fees, it is absurd what some banks charge for a loan. I've closed/refinanced 3 houses and this one was the easiest process.
They told us they've been using the same underwriting rules since 1928 and they've never had an inkling of any trouble that had plagued other banks lately. They also said several local banks have sent their own employees undercover to apply in order to copy the construction loan program in the last year.
Rate was 4%, fixed throughout, closing costs are about $750, no origination fees. Looking at other banks process and fees, it is absurd what some banks charge for a loan. I've closed/refinanced 3 houses and this one was the easiest process.
They told us they've been using the same underwriting rules since 1928 and they've never had an inkling of any trouble that had plagued other banks lately. They also said several local banks have sent their own employees undercover to apply in order to copy the construction loan program in the last year.
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