New Construction Loan Options?

[LJSquishy]

Has anyone who has bought a new construction house done a combo/piggy-back loan (or if they even exist for new construction)? We wouldn't want an 80/20 loan, more like an 80/5/15 (loans would be for 80 & 5 percent, we'd put down 15 percent). I know ultimately we need to just ask various lenders what they offer, just looking for anyone who may have structured their loan like this who didn't put 20 percent down or didn't finance with one loan. The difference in 15% and 20% is $13,500 for the purchase price we're considering ($270,000) which is a pretty considerable difference so if we'd even have the option to do a combo loan to avoid PMI it would be great. We are currently planning to save the full 20% otherwise.

Oh, and would it matter if it were new construction in a preplanned development (HOA) versus a land + new build situation not in a development?

 

[mistysue]

Honestly I would go ask around and banks and credit unions without asking people online. Every time I look on a forum for this type of issue I find out my options are totally different from what people say they could get. We just added on to our house but were debating between moving, building or staying and I was told repeatedly that they won't do those little gap loans to get you to a 20% down payment anymore. DH and I both had credit scores above 800, with a 10-15% down payment and wanted to finance roughly 1.3 times our yearly income, so they weren't approving other people and I don't know where everybody gets these amazing loans with so much flexibility.
Also consider if the house isn't started yet you might not have to close on the loan until the house is done- meaning you might have a year or so to get together the rest of that down payment. That might be where the development vs. land plus build situation may matter- not only in the loan closing timeline but in whether the builder has some trick for financing.

 

[puffkin]

This was 10 years ago before the housing crisis, but when we built our home we were able to do an 80/10/10 loan with no issues. The 10 loan was at a fairly high interest rate though and we were advised to refinance it after 6 months in the house (which we did).

We had much more trouble trying to get a loan to finish off our basement last year. We considered moving and were prequalified for a loan almost double what our current house is but were having trouble getting even $30K out to do the basement. I liked our house/area and wanted to stay but we needed the extra basement space to stay. It was crazy.

 

[ajwolfe]

We did something similiar to what you are talking about when we built our house 3 years ago. However, we built it from scratch it wasn't already in development; not sure if that makes a difference or not. I'm really not sure what percentages we ended up splitting it into, just know it was to avoid issues with PMI.

 

[jedijill]

I would post your question in the Mortgage board on Creditboards.com. There are a couple of mortgage professionals that will answer your question and are quite knowledgeable.

Jill in CO

 

[BCV2003]

We built ours last year as part of a pre-planned development. It was a Ryan Homes development so we didn't have to do any type of construction loan. We did a normal mortgage and closed once the house was complete. We didn't have 20% down but we didn't have PMI either because it was a VA loan. So if you use a developer like that, you don't typically have to do construction loans.

 

[HM]

We built through a developer too.
No loan until the house was finished. Just a downpayment that wasn't all that large.
We carried two loans until our original house sold a three months later.