I am currently trying to decide between a few options. I'd love input/help with the math.
My husband and I are beginning construction on our home (he is a builder/log home kit sales). We will still own the "model home" we've been living in and using as an office meaning there are 2 mortgages in our future.
Options:
(1) Should we take out a HELOC on the property (best I can find locally is prime (4% right now)) to fund construction costs over our savings then refinance at completion?
(2)(a) Should we take out a mortgage right now (15, 20, 30?) to hopefully lock in a lower rate than we could get in 12-18 months (and avoid a second closing)?
(2)(b) If we go this route, do we aim high?
(Numbers just in case: Construction estimate is 300k, we've already paid about 50k, have 100k earmarked to spend from savings, and will aim to keep final project well under estimate. We're adding another kiddo and my salary will be halved starting this fall when I go part-time so keeping costs/payments low is a priority)
Thanks in advance!