New construction/long term financing decision, thoughts?

For my personal situation i would take the long term security of option b.

I will 100% be at that house (unless I’m dead) and I will 100% not have it paid off.

This is my final house.

I’m not asking for opinions on if this is too much house or not. I’m asking for opinions on the interest rate situation.

that's the issue, neither of these two products allows you to lock in 30y post construction.

Suggestions on who might have a construction to perm with a 30y lock?

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Option a) construction loan that rolls into 15year balloon. Rate is 4.85% and is locked in for basically 16 years. Year 1 (construction) is interest only then years 2-16 are amortized at 30y with the balloon at the end of year 16.

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This is what we did with the option to keep the same note after 12 years with a $1500 fee and just go to 30.

Or we can refinance.

eta: First American Bank

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I will 100% be at that house (unless I’m dead) and I will 100% not have it paid off. This is my final house.

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If you need a 30 year loan absolutely do not get a 15 year with a balloon. That makes no sense unless it saves you a ton right now.

I don’t know new construction loans, but I can’t imagine there’s not a new construction to 30 year rollover option available.

OP it sounds like you have only gone to one bank or financing institution. Spend an hour and call 3-4 places at least. Just tell them what you need and ask if they offer it, if not move on.

I am currently in the same situation as you. I decided to go with the the construction loan then regular mortgage. I end up having to pay two closings but I am not locked into the full amount I am borrowing for construction. I am doing this so I can take the equity of my current house when sold and apply it to the final mortgage. I didn’t feel comfortable being locked into that high of a note (full construction cost). Most money people say I am foolish for just not investing the money I have in equity and financing the whole cost. I figure with how much rates have risen it would be a wash with investing it vs putting to principal. Personally I feel more comfortable with lowering my monthly note. Just my case...

Call plaquemine bank. Best construction loan program out there. Talk to Janet. Used her 3 times in last 8 years.

You get approved for construction loan. Then about a month from finishing you find a regular mortgage lon( from anyone you choose) and they let you lick the rate for 30-60 days. Small fee for longer.

Balloon payments are dumb. What if rates are 10-15% in 15 years like they were in early 80’s...?