Applying for mortgage on a builder-financed home?

QuestionsApplying for mortgage on a builder-financed home?
Brendan Amador asked 4 years ago

Hello all,


I recently signed a contract and paid earnest money for a new construction house that is yet to be built.  


It is a builder-financed home, actually started construction this week, will not finish until late April/early May.  I already spoke to a mortgage broker — he pulled my credit report, I gave him pay stubs/bank statements/employer and rental info, etc. — and he gave me a “conditional approval” letter (but rate’s not locked … haven’t decided if I’m going for FHA or conventional) and barring any significant negative changes to my score or debt, I should be good to go (right?).


The builder constructed the contract in such a way that our goal to close is on or before June 30.  He actually did that as a favor for me because I didn’t want to double-pay (i.e., pay mortgage and still pay rent since my lease isn’t up for another two months) and that’s the latest that he can do.  But at this point, I don’t care as much about the double-pay.


The questiong that I have is– when should I apply for mortgage?  Should I start the process maybe two weeks before the completion of the house (so maybe April?), or do it mid-May?  Or should I ask my builder in a month to give me a better estimate time of completion and do it maybe 1-2 weeks before that date?


Of note, I’m going to be out of the country for two weeks at the end of May, and given the closing goal of June 30, I don’t know if I’ll have enough time to close if I apply in June.  And if I apply mid-May, if there is something needed from me in the next two weeks, I will not be in town to handle it.


Any advice would be greatly appreciated, thank you!

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