Can someone tell me when we submit our final loan application for mortgage? Is it when we reserve the lot or when they break ground on our home?

Asked by Betsy Kalgren, Arden Hills, MN Wed Oct 23, 2013

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Bill Boldenow, , Minneapolis, MN
Thu Oct 24, 2013
Ive worked with them in the past Betsy,

Please feel free to call me to discuss. Thank you Christopher for the recommendation!
1 vote
If you are looking for attractive new construction end loan financing, Wells Fargo has great products with long-term rate lock options. Give me a call at 612 667 3743 or go to my web site MIchael Sluis NMLSR ID 400516
Flag Fri Oct 25, 2013
Joseph Metzl…, Mortgage Broker Or Lender, West St. paul, MN
Thu Dec 5, 2013
It depends if you are doing a construction loan, then later on the permanent loan, or if you are just doing the loan when they are done with construction. As the vast majority of people only give a little earnest money, and close when finished, I'll assume that is what you are doing.

So initially, you will get a pre-approval from the lender... Then typically within about 60-days of the home being done, the lender will want to start working on the final loan application. They will need all your updated income documents (W2's, pay stubs, bank statements), and may have you sign a new application. New credit will be pulled, and appraisal will be ordered, and everything will go into final underwriting.
0 votes
Elizabeth Fu…, Agent, Wayzata, MN
Wed Nov 6, 2013
There are many ways to fund new construction. Call me to discuss your personal options. Liz, 612-986-4105
0 votes
Robin Silver…, Mortgage Broker Or Lender, Garden City, NY
Wed Oct 23, 2013
The other thing that none of us have asked you is whether you need what is called an "end loan", which means that you will close on the loan when the house is complete, or whether you need a construction loan.

Most likely from a builder like that, it is an end loan. I would contact a local mortgage company, such as those who have replied here, see who you feel you would like to work with, and take it from there. As I said also, let your contract be your guide as far as timing goes.
0 votes
Betsy Kalgren, Home Buyer, Arden Hills, MN
Wed Oct 23, 2013
Thanks for all of your responses! A little more information - the house we are planning to buy is part of a development (Mattamy Homes), if that makes a difference.
0 votes
I work with Bill at Cascade Mortgage and he knows his stuff. I would contact him directly to get all your answers. Forums are great for general questions, but when you start to become more specific it just works best to work with a lender directly. The majority of all construction purchases today are construction to perm loans so the buyer has 1 neat loan at the end. The good news is Bill is a broker so he will get you the best rate. Good Luck! You can also contact with questions since I do new construction and live pretty close to Arden Hills (work that whole North part of 694)
Flag Wed Oct 23, 2013
It likely will since they usually fund their own construction. Have you signed a purchase agreement with them yet? Are you working with their preferred lender or do you have your own?
Flag Wed Oct 23, 2013
Bill Halfrich…, Mortgage Broker Or Lender, Eden Prairie, MN
Wed Oct 23, 2013
I agree with Bill below. I fully underwrite your file from the start & may lock your interest rate in for up to one year. I have 17 years of experience and would love to chat with you. Please feel free to reach out to me.

Bill Halfrich JR
Mortgage Consultant – NMLS - 332161
Office- 612-328-9892
Direct- 612-562-6362
Cell- 850-225-0836
eFax- 651-319-5647
11995 Singletree Lane #225
Eden Prairie, MN 55344
0 votes
Bryan Sletten, Agent, Andover, MN
Wed Oct 23, 2013
Hi Betsy,

My comments are going to be similar to Tony's. First step is getting preapproved for sure. You want to make sure you work with a lender that requires you to submit all your information to verify your application (2 years of tax returns, 2 months bank statements, 2 recent pay stubs, investment accounts (if applicable), etc.). This step is very important since there's specific information they need to verify.

Now, depending upon what kind of builder you work with will also impact when the lending commences. As an example, if you are buying the lot first (closing then starting construction) you would do a final loan application after the lot bid has been accepted from the seller. If you are buying a lot / home from a big builder like K. Hovnanian, etc. they fund their own construction improvements and you just buy the final product. At the time of signing the purchase agreement, you will be required to have a preapproval letter and depending upon the agreement with the builder a final loan approval by X date. Either way, the final loan application comes after the purchase agreement has been fully executed.

There are slight variables to consider in any case so you will want to talk to your agent and your lender to determine the timeline.

Hope this helps!

Best regards,
Bryan Sletten
Keller Williams Classic Realty Northwest
Licensed Real Estate Salesperson in Minnesota

Phone: 763-250-1138
0 votes
Robin Silver…, Mortgage Broker Or Lender, Garden City, NY
Wed Oct 23, 2013
If you are signing a contract that has a mortgage contingency clause, you should submit a mortgage application to satisfy the conditions of your contract. Although it is true that everything will have to be updated along the way, you really have no choice but to get a commitment.

As far as locking in goes, generally a very long term lock such those needed for new construction are at a higher rate than you will get in today's market, and most often you will have to pay a fee to lock in a 180 day lock, or longer, which you might need for new construction. We keep saying that rates are going to go up, but no one really knows. Although it is a bit of a gamble, this is what you get when you buy new construction.

Remember also though that you can decide to lock in at any time if rates seem to be getting out of hand, you don't necessarily have to wait until you are within 60 days of closing.
0 votes
Bill Boldenow, , Minneapolis, MN
Wed Oct 23, 2013
There are different ways to do this. You should be submitting a application in my opinion before you break ground. Its never too early to know with 100% certainty that you are approved Even if its just for the comfort of knowing your approved before spending time/money in the process.

As far as locking I disagree with the person below who stated not to lock. Rates are pretty good right now. If they stop QE funding we will see a drastic increase in rates. Locking now will protect you if this happens. If rates go down or are less when the home is closer to being complete we can re lock your rate at that lower rate.

I have 15 years of experience and would love to chat with you. Please feel free to reach out to me.

Bill Boldenow
Purchase Manager / Loan Officer
NMLS# 31974
Cascade Mortgage
2801 Hennepin Ave S
Minneapolis, MN 55408

O: 612-252-3347
C: 612-387-4745
F: 866-365-5065


My business is built on referrals from people like you, so please feel free to pass on my name and number to anyone looking to buy or refinance a home. Thank you!
0 votes
Joel Friday, Agent, Coon Rapids, MN
Wed Oct 23, 2013
That is a great question for your loan officer. It may be either time or independent of either date. A home is going to take 90-120 days to build so rate locks may also come into play.
0 votes
Tony Grech, Mortgage Broker Or Lender, Southfield, MI
Wed Oct 23, 2013
Neither really. At this point you should be getting pre-approved. Have them run your credit and provide them with your paystubs, bank statements, tax returns, etc.

Everything will need to be updated within 30 days or so of closing anyway, and you generally can't lock in an interest rate until the home is closer to being complete...normally 30-60 days out, Although some lenders offer "extended rate lock" programs for 6 months, you need to realize you are not locking in at today's rates that you see all over. It will be higher. You pay a premium the longer you lock in for.

So really your final application for the mortgage is probably going to be when the home is about 30-45 days from being ready to move in to. In between now and then you should focus on increasing or maintaining your credit scores, saving up as much money as you can, and not doing anything that will negatively impact your credit - such as opening up any new credit/store cards or taking out any new loans.

I've done hundreds of mortgages for people building new homes. If I can be of any assistance to you throughout this process, please do not hesitate to contact me.

Tony Grech | Mortgage Loan Originator | NMLS #977416
PMAC Lending Services, Inc.
Toll-free (855) 642-4762 ext. 278
Mobile (313) 622-7383
Fax (248) 945-4842
0 votes
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