2nd home financing - Jumbo vs conventional (Lose my cash)

[Kyle Smith]

Hello,

I'm unsure how to finance my new cabin construction loan.  I have two choices, a conventional 2nd home construction to perm loan through Fannie Freddie.  The max loan amount is $625,000 (I will need to bring $88,000 to close)  This will eat up nearly all my cash but I will get the better rate and a lock for 12 months, plus the peace of mind of a one time closing.  

2nd option is a Jumbo construction loan to perm.  The jumbo loan will not have a locked rate and I will be taking a chance the rate will be 1-2 points higher at closing next year.  I will also have two closings vs one.  With a jumbo loan I will be able to retain $80,000 for future investments and help with the down payment of my next cabin.

If I went the conventional loan route, would I be able to cash out refinance at closing or would I have to wait 6 months?  Is the additional cash out refinance cost going to be worth it?  The closing costs along could be 8-10k I think.

I think I know what Robert Kiyosaki would say..."save your cash and use other peoples money!".  However, there is some peace of mind in the conventional loan knowing I am locked into a rate.  We all know rates are going to have to go up next year.  Also, I would be financing less and I'll have better cash flow with the conventional. 

My dilemma is I want to scale quickly and without cash its going to be difficult.

Your thoughts?

Thanks in advance.