New build - Mortgage timing questions

[randomguy1]

Due to Covid-19 my home purchase build was pushed back due to the lockdown and delays from the city & county (permits were not issued due to being closed). With that all situated, we are looking for the house to be completed at the end of Sept or beginning of October. I already have my prequals, when should I start shopping for rates? Ideally I want to shop 3 or so different lenders, so I want to time them all around the same time. When do I start shopping? Do I wait for the builder to say we are 60 days out? 45 days? etc.

Also, what happens if my score improves after the initial rate shopping?

Details - 30 yr fixed, 20% down.

State: TX

Mid score: Expect low to mid 700s.

Thanks.

[polian]

It sounds like you are currently building with a construction loan. Stop me there if I'm wrong.

Does your construction loan lender have any favorable offers? I'd check with them first. It may be advantageous (and convenient) to roll it into a mortgage with them when the construction loan is due.

[randomguy1]

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@polian wrote:

It sounds like you are currently building with a construction loan. Stop me there if I'm wrong.

Does your construction loan lender have any favorable offers? I'd check with them first. It may be advantageous (and convenient) to roll it into a mortgage with them when the construction loan is due.

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I have a mass home builder, building a home. Only money I have down is the deposit (5k) + 50% of upgrades. (I don't think I have a construction loan). 

They offer a builder's credit but I want to shop around the mortgage.

[polian]

Oh, I see - you're doing the same thing I am then. The builder actually carries the construction loan and you instead close on a completed/existing home (with all the stuff you picked out). My builder wanted a pre-approval in place when we signed the purchase agreement so I had that aspect done at the beginning. 

I went with NFCU. I have a loan processor that specializes in new construction purchases, and she has been very helpful. Rates cratered in March for a couple of days before partially rebounding and I locked in then. 180 day lock that cost +0.25%. The docs and pull are good for 120 days. She told me the plan is to re-pull and redo docs 3 weeks prior to close. I only have an estimated date of competion still and nothing firm (Jul 30 so far).

I'd go shopping now if I were you! Exciting times for sure.

[randomguy1]

I expect the money deposited will count towards the downpayment?

Upon further review, I should of worded this differently. How much longer can I wait to start the of the loan process? I think my middle score will increase from now to close which might bump me up a tier, so I would like to time it a little bit more. I can afford to wait a little longer, right? 45 days to close should be plenty?

thanks for your responses. 

[polian]

Yes. In my case, the deposit is held in escrow by the title company and will be used during closing towards closing costs.

I think 45 days would be just fine, but note that there are a LOT of refis going on right now so backlog may vary by lender. Hopefully someone will chime in that would have a better idea.

[peter1974]

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@polian wrote:

Oh, I see - you're doing the same thing I am then. The builder actually carries the construction loan and you instead close on a completed/existing home (with all the stuff you picked out). My builder wanted a pre-approval in place when we signed the purchase agreement so I had that aspect done at the beginning. 

I went with NFCU. I have a loan processor that specializes in new construction purchases, and she has been very helpful. Rates cratered in March for a couple of days before partially rebounding and I locked in then. 180 day lock that cost +0.25%. The docs and pull are good for 120 days. She told me the plan is to re-pull and redo docs 3 weeks prior to close. I only have an estimated date of competion still and nothing firm (Jul 30 so far).

I'd go shopping now if I were you! Exciting times for sure.

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You can lock 180 days out? Is that just an NFCU/CU thing?

[Revelate]

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@peter1974 wrote:

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@polian wrote:

Oh, I see - you're doing the same thing I am then. The builder actually carries the construction loan and you instead close on a completed/existing home (with all the stuff you picked out). My builder wanted a pre-approval in place when we signed the purchase agreement so I had that aspect done at the beginning. 

I went with NFCU. I have a loan processor that specializes in new construction purchases, and she has been very helpful. Rates cratered in March for a couple of days before partially rebounding and I locked in then. 180 day lock that cost +0.25%. The docs and pull are good for 120 days. She told me the plan is to re-pull and redo docs 3 weeks prior to close. I only have an estimated date of competion still and nothing firm (Jul 30 so far).

I'd go shopping now if I were you! Exciting times for sure.

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You can lock 180 days out? Is that just an NFCU/CU thing?

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Probably, but .25% over the life of a 30 year loan is non-trivial.  If you know you're not staying there for an extended period then sure, otherwise the normal rate lock expenses (which are not cheap) are just being amortized over those 30 years.

[polian]

It seemed quite trivial at 15 years.

can anyone answer OP's question?

[JVille]

When the drywall goes in you are typically 45 days from completion. Start then!