I am in the process of self building a home, which I was unable to secure a loan for.
I currently own a home, in which I have about 120K in equity. The banks will not do line of credit or home equity loans because I will be selling my current home as soon as I build my house, which should be finished by June.
They are offering a swing loan, which is 7% interest, 1% of loan amount closing costs ($800-1000), and $1000 in other fees. Turnaround is 60 days, which is a concern for my building schedule.
The other option I am considering is to take a withdrawal and subsequent loan from 401k. I can get a $50000 withdrawal, of which $30K is taxable, or a $20k withdrawal, $10k of which is taxable. I can then take a loan out up to $50,000 at 5.5% interest. All available within 3 business days from start of each transaction. As soon as house is sold I will be getting the money back in the retirement account as soon as possible.
My brain is filled with housebuilding concerns, so any advice would be much appreciated.
