We signed our construction loan yesterday. The loan is for $212,000 and is an interest only loan. The interest rate is 4.125%. The payments are due on the first of the month and we only pay interest on the money advanced. The title company takes care of disbursing all the money and making sure all parties involved sign a lien waiver. Lien waivers protect the homeowner so that there is a clear title when they are ready to close their permanent mortgage.
We will roll our construction loan into a permanent mortgage in 3-4 months when our house is done. I'm hoping that interest rates stay low. For a 30 year mortgage yesterday, it was 3.5%, almost down to 3.375% for a fixed 30 year mortgage. Wow! That is cheap money. We picked a very good time to build.
Y and I have been compromising on the house already. We're going to have a light olive green house with tan trim and a brown roof. I think it will look really nice.
If you have any questions on our construction loan, do not hesitate to ask. I will give you all the details you want.