WHAT HAPPENS IF YOUR HOUSE ISN’T FINISHED WHEN IT’S TIME TO SWITCH LOANS?
Been through this with a couple projects. Most lenders want the house “substantially complete”—that means all the basics are in, utilities work, nothing major missing. Closet doors or a bit of trim usually isn’t a dealbreaker, but if you’re missing appliances or there’s exposed wiring, that’s a bigger issue. Some lenders will do a holdback for small stuff, but it depends on your loan officer and their appetite for risk. If you can get your builder to prioritize the real essentials, you’ll have a much smoother time. The limbo between loans is expensive and stressful—try to avoid it if you can, even if it means picking up a paintbrush yourself.
Most lenders want the house “substantially complete”—that means all the basics are in, utilities work, nothing major missing.
That’s been my experience too, but I’ve seen some lenders get really picky about what “substantially complete” means. One time, they flagged missing cabinet hardware as an issue—seriously. It’s wild how much it can depend on who’s doing the inspection that day. If you’re close to the finish line, sometimes just having receipts for ordered items helps smooth things over. The limbo is no joke... those extension fees add up fast.