another reason to not go in debt...

Thank you for the explanation. I am familiar with the single closing construction loan/mortgage. So if I am understanding correctly the OP can get a mortgage with the bank that has the construction loan but the bank is setting crazy terms basically because they can. Is that right?

we got a construction loan. tiogacounty is right in explaining--they said they would sell it to a mortgage co. as soon as it was done, had it all settled even as to what company. we live in this house full time, our only resisdence. but, this bank has little interest in getting it sold, as they are making their money for now, and dont' much care about us making equity. so they are not looking or helping get a lender for the 'real' mortgage, therefore its up to me/us.

the % this bank wants to write it currently is 8%. that is only for a 5yr fixed, then 20 year ARM. this sounds very bad to me, given the current interest rates, and if they go sky high in 5 years (and i am doubting they will stay or go lower), we'll then have to lock in a rate at that time no matter what. we want at least a 20, maybe 30 yr fixed, and plan to pay off early. so even writing it at 15 yrs would be a possiblity, if given the chance!!

they are suggesting to write it with them at this horrible rate, then take our time finding a better lender. all the while saying i'd have to make a payment anyhow, so what's the difference?! uh, plenty!!! we were told to be able to close in april, were ready to do so, and in june they started looking for a secondary lender. june.

our appraiser was a joke--they are looking for comparable homes in our area, that have sold in the last year, with similar acrage. there are none!! our home was built differently, (how it was done), by us, and we live in an area where very few new homes are built, nor are there many even sold, esp. with small acreages! but yet all we hear about is our comps aren't good. what else can i do about that??! and no other lender will use this appraisal anyhow. so each one will want their own app. done--at my expense. we are only looking to borrow less than half the amt of the current appraisal, which is low anyhow.

You also need to do a free on-line amortization chart on the amount you have borrowed and are planning to refinancing why do i need this? i am eager to learn, so anything you can tell me will be listened to!!

what a mess.

yup, you got it

I'm sorry you are in such an unjust position. I do not currently have a mortgage but I will be building in a couple of months. I feel fortunate in that there is a local credit union that I will be going with. I would hate to go with a larger more untrustworthy company. The mortgage industry seems like such a greedy mess at times. I sure hope you are able to find an honorable bank to work with. The rates are so low right now its amazing. And yeah, 8% for 5 year fixed and then a 20 year ARM is criminal. Greedy, greedy, greedy. Best of luck.

who have you spoken to at the bank? Is it a national bank or more local. Either way I would ask to speak to the branch manager or senior vice president in charge of lending. They usually won't bite. Simply explain what you were promised and that you need to get this taken care of. It would be good if you had some idea of what the going rate was in your area. It would be better for you if you could get the loan from the same bank as long as they played fair.
It would not be a good idea for you to settle for an 8% loan with a balloon at the end of 5 years, then try to move it because you have to pay for two closing costs and those are expensive. I can see why you are so frustrated, I hope you can get this resolved to your satisfaction soon.

By the way, thanks to tarp and all that ilk, small local banks are having to pay 4 times their old cost of FDIC insurance, and even though Obama says he wants to make borrowing money easier, bank examiners are crazy crazy strict these days. As my father would say, they couldn't be pleased if they were hung with a new rope. So, what I am saying is, the bank is facing the toughest regulations that they have ever faced before. Still, no reason for them to be unreasonable.

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misera est servitus ubi jus est aut incognitum aut vagum
(miserable is that state of slavery in which the law is unknown or uncertain)

Could the higher initial rate of 8% be because ya'll built it yourself? and differently?

I'd never want a traditional home. My new home I'm building would not appraise well, as there might be only one or two like it on the continent... However, I'm not looking for a mortgage, and have no desire to ever sell it... actually a low appraisal would come in handy for taxman purposes.

You might have to bite the bullet, and get the high mortgage, to start building equity (if that's important to you)... and like they mentioned, Then look for a lower rate. If your home is different, you might just get the exact same reaction with every lender. Different is great as long as you build with cash... you take the 'Man's' money, you have to 'play' by his rules, or pay the consequences....

good luck!

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Luck is what happens when preparation meets opportunity. Seneca
Learning is not compulsory... neither is survival. W. Edwards Deming

Wells Fargo is working with people now. You might want to go talk with them.
If you have really good credit, they will give you a very good rate.

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Shari

Yep, you are slave to the lender. About interest rates, 8% is not too terribly high compared to some of the rates 10-20 years ago.

Just because banks are advertising 4% loans does not mean they are actually making any at that rate. Don't believe in truth in advertising when it comes to the banking cartel.

And let this be a lesson to not trust anyone with an oral agreement to convert your construction loan to a regular loan. Or even a brush off 'don't worry, we'll take care of you."

What is the name of the bank? Share with us so others can know.

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We will meet in the golden city, called the New Jerusalem,
All our pain and all our tears will be no more.....

Our mortgage broker was Waterstone, the "local" office is in SE Wisconsin, we live 4.5 hours away. The loan is with Suntrust, and we have found the company has very good customer service. When I talked with Waterstone yesterday about refi, they said they can't guarantee the same loan company, as they now bundle & sell packages rather than individual loans.

So we are currently refinancing privately (thanks, Dad!), and our local abstract (title search) company is handling all the paperwork. He has been very helpful in answering questions, guiding us in doing as much as possible ourselves as far as background work. Our closing cost will be about 400, plus another 400 for title insurance, vs 1600 for a conventional refi.

An amortization schedule will give you a payment by payment breakdown of principle, interest, escrow (property tax), cumulative principle, cumulative interest. All you have to do is punch in the interest rate, the loan amount, the years you want to finance for. mlcalc.com will give you payment info. Microsoft Excel also has an amortization feature. Google amortization schedule, loan calculator, etc. They are free.

Having said all that, yes, I have found that rural banks are generally not as competitive as banks in larger cities or internet companies. Your interest rate will vary based on your credit score (HUGE), amount of loan, length of loan, appraisal, equity already built up. Your "credit" is already established, based on previous loans, existing credit card loans, etc. In WI (can't remember if it is a federal or state thing), one is entitled to three free credit reports per year, one from each of the 3 major companies. A score of 740 or higher will help get you the best interest rates. Google "free credit report" and see what you can find out. REPEAT - do not pay for a credit report. (Your loaning institution will do this as part of their research on you, also.)

Good luck.

If the mortgage goes to the secondary market it must be done by an appraiser licenced/certified appraiser in the state where the Subject property is located. Any appraiser who accepts an assignment in an area where they have no geographical competence is in violation of the law, unless he/she informs the client and makes him/herself geographically competent.


Assuming that the appraiser is competent, the difficulty of comparable sales has nothing to do with the appraiser or the appraisal. I specialize in rural and other complex appraisals and 99% of the time the sales I have to use are not really comparable.

The lender should know the situation before they open their file. Because that property may not fit within their guidelines. So that is not an appraiser/appraisal issue but rather a company lending guideline issue.

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Critical thinking -- the other national deficit

That is no reason for it not to be appraised at its true value.

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Critical thinking -- the other national deficit

Uh, why can't you get an FHA loan or a USDA Rural loan? FHA only requires 3.5% down, and I just closed one with 4.5% interest rate (that is the rate they give EVERYBODY). USDA Loan is even better, at ZERO down payment and the same rates as FHA. Yup, just walk into any Wells Fargo office and say "I have outstanding credit, and I want to go FHA or USDA"....

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...'o shame on the mothers of mortals, who have not stopped to teach; of the sorrow that lies in dear, dumb eyes; the sorrow that has no speech... from -'Voice of the Voicless', Ella Wheeler Wilcox

Except that I would stay away from Wells Fargo.

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Critical thinking -- the other national deficit

My guess is that the they don't HAVE 4.5% down to get the house they built and are living in financed already.

Usually the goal with a construction loan is that when the construction is done that the house has instant equity and can be financed without the down payment... HOPEFULLY allowing you to buy/build more house than you had the cash to afford with a down payment.

"Walking away" from this situation would make the bank more than happy. They basically had a house built for them that they will sell (even if below market value) for vastly more than they invested.

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OK, there are plenty of top mortgage companies that offer the FHA and USDA loan products; just pick one!

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...'o shame on the mothers of mortals, who have not stopped to teach; of the sorrow that lies in dear, dumb eyes; the sorrow that has no speech... from -'Voice of the Voicless', Ella Wheeler Wilcox

And let this be a lesson to not trust anyone with an oral agreement to convert your construction loan to a regular loan. Or even a brush off 'don't worry, we'll take care of you."

that is EXACTLY what we fell into. they said it was no problem, no big deal, all set! oh boy!! we're friends and all so, this should be a safe bet, right? yeah, right.

i have talked to the main manager, and he says he doesn't know anything about the case, i should talk to 'betsy'. she's the ditz who we trusted in the first place and has now done a 180--was all bubbly and cheerful, now is all cool and distant.

the bank's name, for all to hear 'first fidelity bank'. its fairly local, so unless your'e here, you prolly do not know it. now that i'm this far into it, i am learning ppl who work there refuse to even have a savings acct there, this place is sooo shady. i could go on for a while on things others have fell into with this place, but seems its all juuust within the law, so what can a person do? not much. i would love to turn them in somewhere but they aren't doing anything illegal, just immoral. and some of it i do claim, i should have looked into it more, but its one of those experience/hindsite things, i had NO idea that this sort of thing coulda come up like this. some of why i posted this in the first place, a warning to others!!!

i called wells fargo on friday. i also called another bank in my area, and have both working on it. i will keep calling til i win. period, as i have no other choice. the 'choice' offered from 'first INfidelity bank' is so rotten. how can these ppl live with themselves???! so mad

Yep. Not as many as before but still plenty.

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Critical thinking -- the other national deficit

If you can not do better make sure their loan has no prepay penalty and bite the bullet.

Cut up those cards. Pay down the debt and refinance. The real reason to mimimize your debts is to keep your money, YOUR Money.

Sounds good on paper, but the fact is that the industry isn't anything like that. Appraisals are going to big outfits ( or even in house, if the mega banks can get away with it!) that pay the folks on the ground very poorly. Recently, I have talked to realtors that lost deals due to appraisers that basically didn't even know the main roads in the region, much less the important local issues. Quality local appraisals by competent knowledgable independent appraisers are in real danger of extinction, and it's wrong. I can recall having to threaten a bank who did an appraisal of a construction loan of mine. They had a comp. from another county and market area. The comparable house was a crap hole with zero evidence of any care to the exterior and a big filthy sled dog, chained to a dog house, in the front yard. The "appraiser" actually included this pic. in his report! It looked like a scene from Deliverance. This was to comp. a new home in a great neighborhood. a project that I had about 40% down on. Unfortunately, appraisal incompetence and fraud are two huge factors in the current mess we face in my industry. Now the pendulum swings the other way, and the feds. and banks are stupid enough to use them as a tool to do harm to themselves.
The OP needs to get a lawyer now. Eight percent interest, and a failure to even attempt to keep their end of the bargain is known as fraud and breach of contract. If there is any documentation to back the claim, a good lawyer should be able to resolve this pretty quickly.

I am very aware of the problems my profession has and I agree with you 100%. I do, however, disagree with local appraisers necessarily being better than non-local. The important part is geographical competence.

I am hoping that the new law will fix a lot of this.

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Critical thinking -- the other national deficit