Have we talked about our financing plans yet? Well, they were very convoluted. We were working with our mortgage broker -yes, broker - on this construction to perm loan where you borrow what you need to pay off the mortgage, what you need for the construction and what you need to pay off any other loans or liens or lines. The loan “pays for itself” (Hah!) during the construction, and at the end it all converts to a regular mortgage. The pros are that you only close once and that you don’t have to pay anything (except lots of interest, which they figure in one big chunk and throw into the loan so you pay interest on the interest). The cons are a bigger mortgage at the end of it all, a higher interest rate (our current rate is 4.5% — pretty impossible to beat these days) and a big chunk of closing costs.
In one of those lightbulb moments — okay, the architect sort of planted the seed in my head — I realized that we already have the amount we wanted to borrow collecting dust in our home equity line, and that the out-of-pocket money we planned on spending is waiting right where it always was, and….wait, we’re done!
No forms, no appraisal, no closing, no closing costs, a much lower interest rate AND, money left over for furniture when we’re done.
Time to start shopping!
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