Just got the final paperwork for my construction loan and the interest rate float is killing me

We locked in the loan for our house addition back in April, but the builder hit delays with the city permits. The bank's rate lock was only good for 90 days, and we blew past that by three weeks. Now the rate is floating, and it's gone up 1.25% since we started. The loan officer said there's nothing they can do because the draw schedule is tied to inspections we can't control. I'm looking at an extra $300 a month just because of paperwork holdups, which feels insane. Has anyone else had a construction loan go sideways like this? What did you even do, just eat the cost?

3 comments

3 Comments

the_tara19d ago

Ugh, that is the absolute worst! We had the same nightmare with our kitchen reno last year (the inspector went on vacation for two weeks right when we needed him). Our float kicked in and added like $200 to our payment for the whole loan life. It felt so unfair because it was totally out of our hands. We just had to suck it up and pay, which still bugs me. I feel your pain, it's a terrible spot to be in.

alicecooper8d ago

Yeah, always get that fee in writing first.

lucashart19d ago

Wait, hold up, that float thing sounds off. A float period is usually a set number of days where your rate is locked but you don't pay extra, it just expires. If your rate lock expired because of the delay, that's a rate lock extension fee, not a "float" adding to your payment forever. That $200 sounds like a one-time fee they just rolled into the loan, which still sucks but it's not a permanent payment hike. Lenders mix up that wording all the time and it drives me nuts.

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