Posted on: 05th Jun, 2009 07:56 am
I applied for a construction loan with First Bank for 520,000 which is 80% of the appraised value of the property and construction im trying to do. The bank came back and agreed to loan me 450,000 dollars . They wants me to put 70,000 of my own money into an escrow with there bank and draw it out to pay for the construction. This would be ok if I had a cash out end loan to recover my funds that I use to cover the short fall but i dont. I don't want to give the bank 20% of my equity and 70,000 dollars. Is there a better way to do this? I have good credt and good reserves and income.
I am unaware of a bank that will offer a second loan on a lot.
This is a house with a C of O. The original owner was unable to finish all the construction that needs to be done. The construction loan was to purchase the house from her and give me the funds to finish it. The home appraised for 650,000 dollars and I was trying to borrow 80% of that. I'm short 70,000.
