How much could one expect to pay in closing costs on a $220,000 construction loan?

Asked by Pelebo, Orleans County, LA Thu Sep 10, 2009

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ian cockburn, Agent, New Orleans, LA
Thu Sep 10, 2009
It depends on who you are using.
With my clients, we sit down and go through:
1) How much cash they have on hand
2) Their credit score
3) Develop a Personal Financial Statement

Now we take this package and we call on specific banks that offer construction loans at competitive interest rates and terms.

The closing costs will vary depending on:
1) How you present yourself - everything noted above, with a construction schedule, projected cash flows, plans for the property and how you can show you can handle the construction.
2) Who you know to call for the loan
3) How you negotiate the points/interest rate/terms
4) Last but not you negotiate the deal on the property to get the lowest price/highest equity in the property the day you buy it.

I do this for clients...from $100K to $4 million projects.

Call me at (504)615-2333 if you need help.
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William Pola…, Mortgage Broker Or Lender, Suwanee, GA
Thu Sep 10, 2009
It depends on whether or not you are closing once or twice right? Close once, you pre-estimate the cost and pay the difference if you go over. Twice: you roll the difference into a new loan. The next thing to look at: Your credit scores may dictate points to pay to qualify. Closing costs typically run 2-3% of the loan but construction loans involve more work for loan officers (not many people do them), so the costs to close may be 3-4%. Unfortunately, it's not like buying an already built house. Much more goes into it.
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Connie Theri…, Agent, Baton Rouge, LA
Thu Sep 10, 2009
The best place for an answer to your question, is to talk with your Bank or Lender -- each lending institution will vary a little, and with a "construction loan" you will pay interim interest -- that will vary with each institution also. Happy Building!!
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