That rate sounds like JUMBO-conforming (e.g. less than 697K).
Who is the lender
1/2 point at the max is still only a few grand. In the scheme of building a house that very tolerable (Its the same amount you would pay for a couple months extra rent during construction)
If you think the contractor will finish in time, and that it will easily appraise at 60-70% LTV. Lock it, No Brainer.
Biggest worries:
1. Are we done yet ?
If you are still 180 days from completion, it is not possible to predict a completion date with any degree of accuracy. (Well, at least that’s my experience from a grand total of one major 4-month remodel that became 8 months).
2. Appraisals. Banks are very conservative on appraisals. If you are in the 50% LTV range you have no worries. If, in your opinion the LTV is in the 70-80% range, a conservative appraisal 6 months from now could put you above 80% LTV.
