Construction loan advice

[okstate_1]

we are working on building a house that is a tear down and rebuild project. We have everything completed and are trying to work on the construction loan part. Our plans were just appraised and the appraisal came in extremely high. The problem is that the bank has told us since the existing house will be torn down we have lowered the temporary value of the land and they will only loan us 80% of the cost to build and not off of the appraisal. This obviously makes us have to put more money to cover the difference and it is above what we have to pay.

My question is does this seem right? Shop around for another loan? Advice?

Thanks!

 

[Rdcldad]

find a lender who is willing to skin your cat

 

[davidallen]

The construction loan process was such a PIA we just got a line of credit that we will use to float our project. But our number was low enough so that with some cash reserves we will squeak by.

 

[osumark]

we are working on building a house that is a tear down and rebuild project. We have everything completed and are trying to work on the construction loan part. Our plans were just appraised and the appraisal came in extremely high. The problem is that the bank has told us since the existing house will be torn down we have lowered the temporary value of the land and they will only loan us 80% of the cost to build and not off of the appraisal. This obviously makes us have to put more money to cover the difference and it is above what we have to pay.

My question is does this seem right? Shop around for another loan? Advice?

Thanks!

Where do you live? How much land? Do you know the banker personally?