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Originally Posted by DETRoadster
Right? It has all the makings of a country music song. We just need a pickup and and old dog to add to the story. 
Credit unions and portfolio lenders are a GREAT tip. We selected a portfolio lender that my wife's business banks with. Were are looking at a "cross collateral" loan which takes into account the value of our current home and uses that to offset debt to income ratio requirements. Its nice because it means we dont have to sell the current home and the rent for 18 months, just to get the construction loan.
Please share any tips you have on your strategy to negotiate the rate down! We found, overall, every bank and CU we spoke to was like "Yep, thats the rate. Dont like it, there's the door. Didnt really want to lend you the $ anyway." What was your general strategy to talk down the rates and are you talking to smaller local banks and CUs?
Keep us posted on the build! |
Very direct and transparent. I had a conversation with each of the lenders to highlight their shortcomings as it relates to their competition. I then took all of the disclosures (five lenders in total) in a zip file and sent it to each of the lenders after the conversation. By them having full disclosures in writing, they were able to use that as "ammo" with management to justify altering their offerings. I did this all in one day and gave them a timeline to provide their absolute best offer by with the understanding that the best overall package will be getting my business.
This ended up reducing what was my best closing costs by about $12k and what was my best rate by about 2%. Fixed monthly costs are reduced enough to tack on another car payment if we wanted (we don't
) and upfront closing cost reduction will just be more money towards equity.
Only way to negotiate interest rate will be with a portfolio-based lender or some creativity with someone buying points - but I was adamant to keep the build and the financing separate to avoid missing opportunities to negotiate the build itself. We've probably knocked off at least $50k at this point in addition to the reduction of recurring interest charges.