Bank is asking for 15% post closing liquidity on a new construction loan – this seems ridiculous

My husband and I currently own our home ($600k mortgage, valued at $750k) and have an annual household income of $400k. We want to build our next home and the construction plans came out to a value of $1.18m. The bank said we would need to put 10% down at closing, which was admittedly hard to do when we couldn’t sell our current home but we secured that amount. Now, the week before closing, the bank says they need proof of 15% liquidity post-closing. This means that after putting down $180k at closing without having sold our current home, they want us to have about $150k extra liquid cash lying around immediately after closing.

Am I crazy or is this a ridiculous ask? This is a farmhouse in Mid-Atlantic America, not a NYC condo. The bank knows this is a construction loan and we can’t sell our current house until construction is done. Who the hell has this much liquid cash? Am I missing something or is this normal?

submitted by /u/archivesbiography
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My husband and I currently own our home ($600k mortgage, valued at $750k) and have an annual household income of $400k. We want to build our next home and the construction plans came out to a value of $1.18m. The bank said we would need to put 10% down at closing, which was admittedly hard to do when we couldn’t sell our current home but we secured that amount. Now, the week before closing, the bank says they need proof of 15% liquidity post-closing. This means that after putting down $180k at closing without having sold our current home, they want us to have about $150k extra liquid cash lying around immediately after closing. Am I crazy or is this a ridiculous ask? This is a farmhouse in Mid-Atlantic America, not a NYC condo. The bank knows this is a construction loan and we can’t sell our current house until construction is done. Who the hell has this much liquid cash? Am I missing something or is this normal? submitted by /u/archivesbiography [link] [comments]

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