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How can I go thru a contractor that will Pay on the construction initially?
I am wanting to built a house and I went to a bank. They told me that the way things are today they(the bank) will pay 80% and we would have to put 20% of the construction cost. How can I best find a contractor that will pay for the construction out of his pocket so we dont have to pay on our behalf. PS: the construction downpayment is so an individual cant walk away from a deal.
Public Comments
- No contractor will take on a job without a meaningful down payment, as well as continued progress payments. I'm not sure what you're looking for here, do you want someone to provide a bridge loan, covering costs until the project is complete and you can finance it through the bank?
- What you are seeking a construction person to do is called fraud. You some how want the down payment to be at the cost to the contractor, so the bank will approve and release the 80% loan. Most house that are constructed are valued at more than the construction price. Say it cost $80,000 to build a house, this house when completed should be valued at close to $160,000. Most banks will do both the construction cost as well as permanent financing, once the construction is complete, therefore you would only have to make one mortgage loan application. You should contact a mortgage broker instead of a bank. Mortgage brokers, have more underwriters than your local bank and is able to put your desires in a more favorable light than yourself just walking in off the street or even if you have an account in their bank. I hope this has been of some use to you, good luck. "FIGHT ON"
