Building a new home

3 Replies

We sold our house. We now have 400k to use to build new house that will cost approx 600k.

With low rates should we get a loan for 80% and invest the difference or use the 400k to pay building costs?

@Rick Oaks

In my limited experience, even with a new construction, it wouldn't hurt to put some aside just in case. With how volatile the world has become, even if you just put it in a mixture of high interest savings or roth IRA, you'll still have access to those funds and they can make you some money at the same time. Perhaps just get a loan for half of the building costs and pay off the rest to give you a modest mortgage which could probably be refinanced in a couple of years to bring it down even further. Hope this helps.

@Rick Oaks

Cash is king.  With interest rates as low as they are right now, use maximum leverage to scale whatever you're trying to do and keep your cash for emergencies.  No question about it.

Fannie Mae one time close construction to perm financing is in the 3's right now. They go up to 90% ltv (with PMI of course) with a 12 month lock. You can go down to 80%, not have to deal with PMI and keep your cash.

US Commercial doesn't do these loans (we don't do anything conventional) so this is not a solicitation.  I know people that have the product and they're killing it right now with rates so low.  PM me for a referral.