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    Land/construction loan info

    I'm looking at buying some property once I sell my house and then build on it. We are looking for 10-20 acres. I guess my question how does this all work? Do I just get a construction loan to buy the land and build the home then roll it into a mortgage? Or do I have to get a land loan first, then get a construction loan and then roll both together? Please educate me!


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    #2
    I'm no help but I have the same questions. following

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      #3
      You can do it both ways. Just depends on your time frame for building. I would talk to a good mortgage person. StanR is a site sponsor and a great guy. Shoot him a PM

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        #4
        I would recommend one loan to purchase the property and build the home, that way you save on closing costs. You would then have another closing to go into permanent financing.

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          #5
          Originally posted by captainsling View Post
          You can do it both ways. Just depends on your time frame for building. I would talk to a good mortgage person. StanR is a site sponsor and a great guy. Shoot him a PM
          Thanks for the plug....

          But do not have access to land or construction loans.

          There are several others that will jump in that have access to other mortgage products.

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            #6
            So you can simply go to a mortgage officer and show him the property and the home you plan on building and get your mortgage?


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              #7
              Originally posted by Tbone3636 View Post
              So you can simply go to a mortgage officer and show him the property and the home you plan on building and get your mortgage?


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              We used Capital Farm Credit when we bought our property and They could probably answer any questions. They deal in mostly rural property. Very reasonable costs, and you become a share holder and get yearly dividends. Our usually equalled about 2 payments a year.

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                #8
                Originally posted by Tbone3636 View Post
                So you can simply go to a mortgage officer and show him the property and the home you plan on building and get your mortgage?


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                I would recommend you find an independent bank in the area where you live and go discuss your plan with them.

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                  #9
                  PM sent

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                    #10
                    Most banks wont do a construction loan on a piece of land they dont own. They will wrap the land loan into the construction loan. THey need to be able to foreclose the land and what has been built to recoup their money. If they dont own the land, their claim comes 2nd when trying to collect.

                    Lots of banks will do a one time close loan. Construction turns into mortgage at the end.

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                      #11
                      8mpg is right on with what I've seen, loans on just land is rough. My last land purchase was on a home equity loan, way less work and holding cash opens up better deals.

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                        #12
                        Also, FYI, most banks want 25% or so down on land purchases.

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                          #13
                          You can find a bank to do the land and interim but you better have Ducks in a row. Meaning plans and signed contract with builder. I just dealt with a bank that only required 10% down on land if you just go that route for now.

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                            #14
                            Originally posted by chasinracks View Post
                            You can find a bank to do the land and interim but you better have Ducks in a row. Meaning plans and signed contract with builder. I just dealt with a bank that only required 10% down on land if you just go that route for now.


                            If I'm going to sub the build out myself will it make it more difficult to get financing?


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                              #15
                              Originally posted by Tbone3636 View Post
                              If I'm going to sub the build out myself will it make it more difficult to get financing?


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                              Way harder. Most banks want a builder on record which cannot be you. Now, it can be your friend, father, cousin, etc that is a registered builder. Banks dont have the confidence in people to be able to contract out their own home and finish on time or on budget. You can try using a builder and pay him to be a builder on record or try an building service like Ubuildit.

                              If I end up building in the next year or two on my property, I will be using Ubuildit. They basically go on as the builder or record, map out the build schedule and follow the build and inspect the thing to let you know about issues.

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