We are locked in to new construction that keeps getting delayed. Every couple weeks our payments go up as interest rates rise and there’s nothing we can do. It’s brutal.
There's got to be some out, although it might not be pleasant. What happens if you don't secure financing? What happens if the developer never finishes?
Usually you have a pretty high rate construction or bridge loan that you plan on refinancing into a normal home loan when there’s a house to backstop it.
But you can’t get that backstopped loan until the house exists.
Likely you could pull out and lose a deposit (and a good lawyer might even get that back because of delay) but you’re still without a house.
The builder we used builds to spec and then you buy the house minus the initial deposit in full. He’s not a fan of doing customer-originated/owned construction loans, which is fair, I believe a good number of builders in our area operate the same way.
We are waiting for the contract addendum with final pricing. It may still make financial sense to go through with everything, once we have all that. It’s just annoying that in this situation, our house costs are fixed against a particular point in time, but interest rates continue to rise.
Can you put some money into instruments to hedge against rising interest rates? Something like TBT comes to mind (it's a fund that's short treasuries basically, so increases in value when interest rates rise) or buying puts against long bond funds.
People bitch about crypto all the time but I never hear anything about these contracts with adjustable rate loans. Those should be illegal; they lay people out. With crypto you only lose the money you put in.