Alex Brandt
PARKED
Hello All,
I am needing some feedback from people who have gone through the process of building their own home to get some perspective if this timeline for financing is normal. I am a first time home buyer and I decided that building would be the best way to go.
Background: In August of 2016 I paid cash for two improved lots (ie: has sidewalks, paved street, utilities stubbed out), each one a 1/4 of an acre for a total of $9,995. In December 2017 I transferred one of the lots to a business I started up for $30,000 (the lot I am building on).
On March 8, 2017 I applied for a construction loan with US Bank and received my pre-approval on March 12,2017. I signed the contract with the builder on March 25,2017. I had the engineered (stamped) floorplans by April 12. The bank received the builder's packet on April 17th. I submitted the engineered floor plans to the City for approval on April 21st. The bank sent me the loan estimate and disclosures on May 2nd. My build permit was approved by the City on May 12. The appraisal was ordered sometime in early May and I didn't receive it until June 14th (about 45ish days - so that was normal). The appraisal came in at $30k for the lot and $140k for the structure.
It's now July 6th and the lender is saying that closing and signing will be the week of July 17th. I've already provided the lender with proof of funds to cover the cost of closing. The title/escrow company hasn't even received my loan information from the lender at this time (it took two days to negotiate with the title/escrow company to lower their fees as they wanted $1k just do the construction hold back/fund dispersing). My 90 day rate lock with the lender expired in June and they've re-locked my loan at a 3.8% rate (said they don't need to re-pull my credit as my credit score was high when I initially applied). Also, my 90 day price lock with the builder expired on June 25th but they've told the lender it is a fixed price contract and I have no intentions of requesting anything from the builder to change the price.
I've asked the loan processor if its normal for construction loans to take 120+ days, but no response yet. I'm doing 20% downpayment based on acquisition costs ($152,500) and my appraisal came in higher ($170,000) so my loan to value ratio is 72% (loan amount is $122,500).
I feel that this process should not take this long since everything was on a 90 day rate/price lock and this is a conforming/traditonal loan. My biggest concern is that the builder comes back and increases the price of the contract since the price lock was only 90 days (despite the builder telling the lender it's a fixed price contract and not a cost plus contract).
If the builder does increase the price of the contract would I have any recourse with the lender since they are taking forever and I have no room in the loan for price increases/contingencies?
Thank you for your time and any help would be great appreciated.
I am needing some feedback from people who have gone through the process of building their own home to get some perspective if this timeline for financing is normal. I am a first time home buyer and I decided that building would be the best way to go.
Background: In August of 2016 I paid cash for two improved lots (ie: has sidewalks, paved street, utilities stubbed out), each one a 1/4 of an acre for a total of $9,995. In December 2017 I transferred one of the lots to a business I started up for $30,000 (the lot I am building on).
On March 8, 2017 I applied for a construction loan with US Bank and received my pre-approval on March 12,2017. I signed the contract with the builder on March 25,2017. I had the engineered (stamped) floorplans by April 12. The bank received the builder's packet on April 17th. I submitted the engineered floor plans to the City for approval on April 21st. The bank sent me the loan estimate and disclosures on May 2nd. My build permit was approved by the City on May 12. The appraisal was ordered sometime in early May and I didn't receive it until June 14th (about 45ish days - so that was normal). The appraisal came in at $30k for the lot and $140k for the structure.
It's now July 6th and the lender is saying that closing and signing will be the week of July 17th. I've already provided the lender with proof of funds to cover the cost of closing. The title/escrow company hasn't even received my loan information from the lender at this time (it took two days to negotiate with the title/escrow company to lower their fees as they wanted $1k just do the construction hold back/fund dispersing). My 90 day rate lock with the lender expired in June and they've re-locked my loan at a 3.8% rate (said they don't need to re-pull my credit as my credit score was high when I initially applied). Also, my 90 day price lock with the builder expired on June 25th but they've told the lender it is a fixed price contract and I have no intentions of requesting anything from the builder to change the price.
I've asked the loan processor if its normal for construction loans to take 120+ days, but no response yet. I'm doing 20% downpayment based on acquisition costs ($152,500) and my appraisal came in higher ($170,000) so my loan to value ratio is 72% (loan amount is $122,500).
I feel that this process should not take this long since everything was on a 90 day rate/price lock and this is a conforming/traditonal loan. My biggest concern is that the builder comes back and increases the price of the contract since the price lock was only 90 days (despite the builder telling the lender it's a fixed price contract and not a cost plus contract).
If the builder does increase the price of the contract would I have any recourse with the lender since they are taking forever and I have no room in the loan for price increases/contingencies?
Thank you for your time and any help would be great appreciated.
Dislike ads? Become a Fastlane member:
Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)
Last edited:
Membership Required: Upgrade to Expose Nearly 1,000,000 Posts
Ready to Unleash the Millionaire Entrepreneur in You?
Become a member of the Fastlane Forum, the private community founded by best-selling author and multi-millionaire entrepreneur MJ DeMarco. Since 2007, MJ DeMarco has poured his heart and soul into the Fastlane Forum, helping entrepreneurs reclaim their time, win their financial freedom, and live their best life.
With more than 39,000 posts packed with insights, strategies, and advice, you’re not just a member—you’re stepping into MJ’s inner-circle, a place where you’ll never be left alone.
Become a member and gain immediate access to...
- Active Community: Ever join a community only to find it DEAD? Not at Fastlane! As you can see from our home page, life-changing content is posted dozens of times daily.
- Exclusive Insights: Direct access to MJ DeMarco’s daily contributions and wisdom.
- Powerful Networking Opportunities: Connect with a diverse group of successful entrepreneurs who can offer mentorship, collaboration, and opportunities.
- Proven Strategies: Learn from the best in the business, with actionable advice and strategies that can accelerate your success.
"You are the average of the five people you surround yourself with the most..."
Who are you surrounding yourself with? Surround yourself with millionaire success. Join Fastlane today!
Join Today
