new home mortgage question

[rferg84]

Laws changed on 1/1 I believe for home equity, it used to be the case but I think you can do a traditional mortgage now. Not everyone knows the new laws

[Codie]

Laws changed on 1/1 I believe for home equity, it used to be the case but I think you can do a traditional mortgage now. Not everyone knows the new laws

no sir it would still be a home equity loan if this is his homestead. The new laws would just allow him to refinance that home equity loan down the road back to a NON Home Equity loan via a "Seasoned Refinance".

This is the most important advice on this thread. If you pour the slab without the loan in place no one will make you a loan on this property.

Here is my advice. If you do a home equity loan the problem with that is the rate will be floating. In this low interest rate environment there is no way I'd want a floating rate and not a fixed rate.

I'd get a construction to perm loan. Ask about a one time close to minimize closing costs. I'd borrow what I wanted and pay cash for what I wanted. At the end of it you can have some low rate fixed rate money. Make sure to look at the after tax cost of the mortgage loan if you can deduct mortgage interest because the tax effective rate will be lower than the face rate.

You could also tack on a home equity loan at the end of the process up to 80% of the value of the home. That's cheap money that you don't pay for unless you need it.

There are fixed rate Home Equity loans available in the market. I have one on my home and do them for customers all the time.

Take BrianL's and Throwindarts advice please

[CaptainDave]

Just an FYI on Home Equity loans and Home Equity Lines of Credit.

Interest on Home Equity loans and LOC's will not be tax deductible in 2018 going forward. This is a very specific change that came out from the brand new set of tax reforms.

[Austin]

Your questions have pretty well been answered.

If you build with margin funds then want to go to a perm loan that is fine but it will be a home equity the rates on these are typically 1/8-1/4 higher than a traditional loan.

I will pm you my number if you want to talk to someone in the mortgage industry who is not trying to sell you something

[justintyme8303]

Following. I’m somewhat in the same position. I’m leaning towards a full construction loan and turning that into a First. I have the cash to pay for the whole thing but want to use someone else’s money while it is cheap. My 22 acres is paid for.

If you can build your house 100% out of pocket why in the world would you want to go in debt ?

Your land is paid why not have the house paid too and owe no one?

[rtp]

I'm no help here, but if you are moving landscaping stones I may or not be for hire

HA! Never again!

[rtp]

If you can build your house 100% out of pocket why in the world would you want to go in debt ?

Your land is paid why not have the house paid too and owe no one?

Because my money can make more working for me than it costs me in a mortgage. Money is very cheap(historically) to borrow right now. Say I decide to borrow 500K at 4.5%, my hope would be that I can do much better on my investments than 4.5% per year over the 30 years. If interest rates rise as we all expect them too that loan at 4.5% becomes even more beneficial. Hopefully that makes sense.

[Dejashoot]

Because my money can make more working for me than it costs me in a mortgage. Money is very cheap(historically) to borrow right now. Say I decide to borrow 500K at 4.5%, my hope would be that I can do much better on my investments than 4.5% per year over the 30 years. If interest rates rise as we all expect them too that loan at 4.5% becomes even more benefitial. Hopefully that makes sense.

This - Saved me from typing. Money is cheap to borrow right now. It won't likely be this cheap again for a long time.

[mikemorvan]

I'm not up to speed on current changes in regulations, but: I believe the loan would be considered a Home Equity loan. There are some peculiarities about Home Equity loans in Texas. You can only have one at a time, "once a Home Equity loan / always a Home Equity loan, etc. They can present some challenges and limit options in the future. Do plenty of research and make a well informed decision.

Good luck with it all.

[M16]

Your land is paid why not have the house paid too and owe no one except the yearly rental fee to the government who actually owns your home and land even though you paid for them?

fify

[rtp]

fify

Aint that the Fing truth.