Board Topic: Construction & Permanent Financing
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Construction & Permanent Financing

Posted by: dozer25 Jun 23 2003, 08:03 AM
O.k., here's my problem...

After much diliberation, my wife and I found and contracted our first home to be built. We had no problem qualifying for a construction loan. Now, it looks as if my wife may lose her job, and I'm afraid we will not qualify for the permanent financing. What happens if we can't? This has to happen from time to time...people get laid off, even die...any advice would be greatly appreciated.


Posted by: loanuniverse Jun 23 2003, 10:56 AM
QUOTE
After much deliberation, my wife and I found and contracted our first home to be built. We had no problem qualifying for a construction loan. Now, it looks as if my wife may lose her job, and I'm afraid we will not qualify for the permanent financing. What happens if we can't? This has to happen from time to time...people get laid off, even die...any advice would be greatly appreciated.


Dozer25:

I am very sorry to hear about your wife loosing her job. I think the best way to get construction financing is to have the construction loan transform into a more permanent type of financing automatically. This is usually the case in commercial lending when the entity constructing the building(s) is going to keep it/them.

Taking into consideration that my experience is concentrated in commercial lending, all I could really advice is to talk to the officer that got you the construction loan. You have the fact that Banks truly do not like to foreclose when it can be avoided working on your favor. So many things can happen depending on the bank you are dealing with and the people within that bank, that it would be pure unfounded speculation on my part to tell you what could happen.

On the other hand, you should seriously assess the repayment capability of just one income. If the real estate market is still hot or at least lukewarm, and your remaining income is too little to repay it without extraneous hardship it might be best to sell the property once completed.

Sorry, I couldn?t help more.

Posted by: dozer25 Jun 23 2003, 11:23 AM
Thanks for your reply. smile.gif
The thing is, I'm really making alot (more than I ever have, anyhow) of money and I know we will have no problem affording this home on my income alone. Lenders don't always see it the same way, and don't consider all income, or so I'm told. I hope they can work with us...I'm reluctant to approach the subject until we know for sure if she will be laid off. Aside from the house problems, she is actually EXCITED about the idea, since it will allow her to return to school, which coincidentally would lead to more income (MGIBill) that we "can't count".

Posted by: loanuniverse Jun 23 2003, 05:34 PM
Good luck, and I agree no need to bring this up until it is necessary.
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