Construction loan to mortgage loan. Can I get locked rate?

Question

Looking into getting a construction loan that we will transfer to mortgage. Can I get pre-approval for the loan and have a locked in rate for the mortgage? Or does the mortgage rate go based on when the house is completed and we transfer the loan to the mortgage?

Answer 1

You can in some cases.. depends on the time frame of the construction. The longer out you lock the permanent rate however, the higher your rate will be. In other words if you lock for 30 days, you get a better rate than if you lock for 60.. each additional 30 days costs you more. Also, if rates go down during the lock period you are stuck with a higher rate or paying to buy down the rate.

Answer 2

I'd call a couple of mtg co's. I'd call a couple of banks and a credit union in your area. You MAY find some that woll do what you want. You shouldn't have to apply for loan to get the answer--Do they offer the ability to roll the construction loan to permanent mortgage? It would be a little risky for them to lock a rate 6 months into the future.

Answer 3

Yes you can get locked in a rate

Answer 4

Yes you can get a mortgage loan

Answer 5

Yes, you can get a locked rate.

Answer 6

Lenders would not be likely to lock in a rate that long

Answer 7

Depends on the bank. When we built, we could not lock in before 90 days, but that rate was higher (slightly). Took 9 months to build so we floated for 6 months before having to commit. Banks are not in the business of under-charging so they push off the lock in as long as possible (for just the reason you want to lock in now). Call a couple if lenders and ask.

Answer 8

The rate is based on rates when you actually get the mortgage, yes.