When to apply loan for new construction home?

[nc]

At last we found a house and we will sign purchase agreement on coming Tuesday. It is a new construction home in existing subdivision. I have an option to go with the builder financing or arrange my own. Construction is expected to finish by end of Jan/2013.

How this new construction financing works? Should I apply for the loan at couple of places and compare rates now? I will get rate lock for 60 days and in some cases up to 150 days with higher interest rate.  

I already have two pre-approvals, I will put 20% down, have excellent credit and DTI is only 1%.

Should I start applying now or wait for some time? Can I get conditional approval now with rate locked?

Are existing two pre-approvals will be enough to satisfy builder or will they run credit when I sign purchase agreement?

Thanks in advance,

NC

[indecison]

I would think that the 2 pre approvals you already have is enough for the builder to move forward. Once it gets closer to completion then you can start shopping the loan.

[ChangiBear]

We are building as well, and the builder's lender ran my credit and sent my file through underwriting to make sure I would be approved after signing the purchase agreement. They will begin building after they get the necessary permits. They will send my file to underwriting again once we are ready to close.

As far as my outside lender, they just gave me a pre-approval and that's it. Underwriting will occur once it's time to close.

[nc]

It means builder will pull my credit  after signing purchase agreement even if I decide to go with outside lender?

[ChangiBear]

Hmmm, that may depend on your builder.  I'm building with Toll Brothers and you have to qualify with their lender regardless of using an outside lender.

[nc]

I think it looks true for Ryan Homes also, I have to qualify with their lender "NVR Mortgage" regardless of using an outside lender.