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.I have construction loan and ill be interested in information on converting this loan to a mortgage.House is nearly complete.I bank with the bank where i have the const. loan and they will do a mortgage,but would like to get a better rate here if possible.Don't know what rate will be yet.Also don't know if they will move mortgage some other institution.Any info you provide will be appreciated.Thank You,LW
The best way for you to get accurate pricing for your situation is to call and talk to a mortgage specialist at 1–800–531–8722 (USAA) . There are also a few online calculators you could use, but I think the easiest and most accurate way to get the information you need is a quick phone call! Congratulations on your new home!
I think (I am not an expert in this area) that the discrepancy arises depending on the type of loan.
Here are some details an expert as USAA provided:
Typical Construction Loan - The builder draws funds as needed during the various stages of construction ie. Pouring the slab, framing, drywall etc - The borrower only pays interest on the drawn amount - The bank requires inspections prior to each new draw to ensure the previous work has been completed - Upon completion, a new, permanent loan will be facilitated and a separate closing will be required
New Construction Loan - There are no draws, the builder pays for construction - If a conventional loan is used, the initial appraisal is based on the plans and specs provided by the builder and final inspection will be performed to ensure completion -
If a VA loan is used, the appraisal takes place once the home is 95% complete and a final inspection will be performed to ensure completion.
I encourage anyone with specific questions and concerns to call and talk to an expert! 1-877-314-2255
They will be able to answer any specific questions and provide you with the most up to date and relevant information!
I asked an expert here at USAA to send along any comments he had on this topic and here is what he had to say...
1. You will need to ensure the builder is VA approved, if not, getting them approved is a simple and fast process. We can help! Unfortunately this is not true if the project is a condo.
2. If the builder is building a neighborhood and an HOA is formed, ask if the the voting rights have been released to the association. If not, it could pose a problem for loan approval.
3. Its important to note the home must be 100% complete in order to close on the loan. Escrow holdbacks to complete unfinished items are generally unacceptable"
I hope this information helps!
I have some specific questions about VA construction loans through USAA. Your post back in 2012 was perhaps the most promising tidbit of information I could find on the subject. Would you please respond via the following email address?
USAA Member since 1987
Thank you for reaching out to the community. Unfortunately, Community Managers do not respond back to members out of channel. But I did forward your request to someone who will be able to assist you. Thank you so much for your membership!