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Rando
USA Fan
When IPs were Visible
Member since Apr 2015
22039 posts

Posted on MB too, float down option
Excellent credit.

GMFS is saying up to 12 months, 4.99% interest only to build.

3% current rate.

But they want to do a 5.5% lock with float down option to current market rate when construction is finishing.

I've never built before with a mortgage, but that seems odd.


way_south
Member since Jul 2017
607 posts

re: Posted on MB too, float down option
We used Whitney instead of gmfs. We got a one time close, 2.85% construction loan that rolls to permanent. We closed in December when rates were a bit lower.

And I hope we finish in a year, the rain has had our concrete pushed for a few months so far.
This post was edited on 5/4 at 3:01 pm


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F73ME
LSU Fan
SE LA
Member since May 2018
431 posts

re: Posted on MB too, float down option
quote:

they want to do a 5.5% lock with float down option to current market rate when construction is finishing.



If this isn't a red flag inflation is coming, I don't know what is.


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tiger94gop
LSU Fan
GEISMAR
Member since Nov 2004
2687 posts
 Online 

re: Posted on MB too, float down option
Check with your CU or Bank of White Castle for Construction. Stand Alone, you may pay a bit more in fees, but you will save because:

1. GMFS is essentially a big broker and don't have the lowest rates.; never have. Just alot of commercials.

2. The banks take a risk with a one time close that rates will be headed on the right direction and that your credit and financial situation will not change during the construction period, so there is some risk factored into their rate as well.

3. With pricing the way it is, the only thing that will keep the economy from imploding is low rates. The Fed really can't raise them much or the whole house will fall down. So if you can get a commitment from a good builder and get it built quickly. You may possibly get a better rate than what GMFS is quoting you on a separate permanent loan.

4. Always look at rate because you generally will pay out a mortgage over time. Unless you agree to some exorbitant amount on fees, you should always be more focused on rate.



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