Paying for new home construction

We are unsure how to proceed with funding our new home construction. In the permitting phase now and should begin construction after the first of the year.

Background:
* we own our current home, mortgage-free
* purchased the lot for new home in 2009 with 25% down but with the decline in real estate values (Washington state), we have very little equity.
* new home plus land will be valued close to seven figures
* with home construction savings and sale of current home, we should have approximately 75% available for new home but will need a mortgage for the remainder (not a pleasant thought after all these years)
* new home should be completed summer 2014, but we do not plan to move in until summer 2015 (new home will be our vacation spot for a while)

Options
* use home savings to cover approx. 30% of house/land cost. Take out mortgage on remaining 70%. Sell current home in 12-24 months, refinance new home loan with additional principal. Loan rates will undoubtedly be higher when loan refinanced.
* take out a mortgage on current home, apply the loan to new home purchase. Sell current home, pay off the mortgage and the surplus (assume can only mortgage 70-75% of value) placed in secure savings account to apply to mortgage of new home or, if rates are ok, refinance with residual proceeds from current home.
* sell current home now, rent for a couple of years and apply proceeds immediately to new home finance package.

thoughts?