Even when we were done with fetching all of the things U.S. Bank wanted for the construction loan, we still weren’t done with the hassles. We had to attend the construction loan closing in-person, even though we were able to close on the land and transfer title electronically. The demand for an in-person closing and wet-ink signatures felt archaic at this point.
When we arrived for the construction loan closing (with two young kids in tow), a number of the initial documents were wrong. They failed to give us credit for fees or expenses we had already paid, like builder’s risk insurance. Whenever you go through construction or closing documents, make sure to read them. Now, over the course of a couple of different closings, we have literally saved thousands of dollars by reading our documents. Nobody cares about keeping your money in your pocket as much as you do.
Another section of the disclosures provided that we would be in breach of the contract if we 1) didn’t start to build within 30 days of closing the loan, and if 2) we didn’t finish the project in 11 months. This was contrary to emails we had exchanged with the bank. And contrary to reality – neither of those things were going to happen.
When I called our contact at the bank, she explained this was “just boilerplate.” We didn’t want to sign a contract that didn’t represent our agreement. So we asked if we could include an annotation noting that the clauses were amended per our emails with the bank contact. She said that was fine. We signed the documents, finished the closing (so we thought), and went on our way.
Turns out the amendment wasn’t fine. The next day, when the loan was supposed to fund, the loan “closer” told us the documents couldn’t be altered, and we needed to re-sign. That kicked off a whole host of back-and-forth emails about how we couldn’t get them wet signatures the same day, so needed to sign things electronically. Or they needed to send a courier to us with the documents. Somehow signing things electronically was foreign to everyone at Land Title, even though they closed the property purchase with electronic signatures.
Then, magically, it turned out that we could electronically sign the documents that needed to be re-signed.
The whole thing felt like a lot more hassle than it needed to be. We had dim hopes that the draw process – actually getting the loan money to Shaun and his subcontractors – would be smoother. The bright side, at least for us, was that that part of the process would be mostly Shaun’s problem and not ours.
So finally our construction loan was closed and funded. It was an interest-only loan for a year, and then it would convert automatically to a 30-year fixed mortgage at 4.125%.