Document the construction milestones
Review what triggers the forecast closing date: foundation, drywall, inspection, utilities and certificate of occupancy. Delays may affect when a loan can close and which documents must be refreshed. A verbal estimated date is not the same as a guaranteed delivery term.
- Get milestone updates in writing
- Check contractual delays and cancellation provisions
- Leave room for final inspection and lender conditions
Understand lock options
A rate lock usually has an expiration date. Extensions may cost money, and a float-down feature may have limits and conditions. An advertised low interest rate may assume closing within a period shorter than the projected construction schedule.
- Ask the lender for lock, extension and float-down terms
- Compare the price of long versus short locks
- Know what happens after lock expiration
Watch cash-to-close changes during delays
As construction progresses, insurance, appraisal and credit documents may need refreshes. Interest rates, tax estimates and prepaids may also change. Compare the builder's payment timeline to your current housing expense if you will be carrying two residences temporarily.
- Revisit the lender estimate after schedule changes
- Do not make irreversible moving commitments too early
- Confirm insurance effective dates and available cash reserves
Official information
Terms, loan rules, funding and eligibility can change. These references are for education; always confirm the current written terms with the appropriate agency and lender.
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