Final Loan Amount Is More...What Happens?

[MNnFL]

So here's the back story...

I am doing new construction and my closing date in not until May 2013. Becuase I am doing new construction, my loan application had to go to Underwriting. I found out last Thursday that my application has been approved by U/W and in April I would have to submit updated pay stubs and bank statements. No Problem. Here's the question though...

The amount that was submitted to U/W was $369,150. This amount was with an estimated upgrades package of $10,000. Well, I recently went to my design appointment to pick out my finishing and the instead of spending $10,000 I spent, about $17,000. Now, the original application included a projected $10,000 ($369,150), but since I went over by $7,000 (bringing my total loan amount to $376,150), what will they do when its time to close. Will this additional amount be included, or will I have to pay out of packet at closing? Is there normally wiggle room for something like this?

[nois]

The lender will add the additional cost to your loan amount.

If you were shopping for an existing home, the lender/UW team would give you a maximum amount you were approved for. But since you're doing construction, they just run the application at the projected cost of the project. It would be unreasonable to lock the loan amount this early in the process. Just submit the additional cost documentation to your lender and they will update the total loan amount.

[MNnFL]

Thanks Nois - Is this something I should have the builder do now (submit the updated cost) or is this something they (the lender) will see as we get closer to closing?

[nois]

I would just give the lender a call and update them on the change verbally, for your own peace of mind. Good lenders welcome calls, questions and updates. This probably won't be the last change before closing.

[tooleman694]

You just need to make sure that adding the 7k didnt throw your ratios out of wack, otherwise yes you would have to bring more to closing to cover it.