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Can I use land appraisal as a down payment on a contruction loan?

Im buying land for $50k, in the area that is worth $150k+. I want to get a $300k construction loan. Can I use the $150k as a down payment and only have a $150k loan payment? by zeebah1789 from New Carlisle, Indiana. 13 days ago Reply


I can get you a loan to do it all at once. Let's talk. 317-215-6687 or jasbury@winterwood.net. I'd be glad to help. And yes, it is possible.

13 days ago
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 7,862 contributions

Much more info needed, and your question is a bit confusing.. But in general, if buy land (for cash) and spend $50K, and you want to take out a construction loan, then the lot value is sufficient down payment to qualify for a construction loan. At this point, lets say you apply for construction loan for $200K, and all $200K was used in construction.. then once it's completed, you would apply for a $200K mortgage to pay off the construction loan. at this point you will owe $200K on a property worth $300K.. However, if you buy the lot for $50K, and finance $50K.. then according to guideline, you have no equity right now.. the equity will only be recognized after 5 months.. If after 6 months, the property is still worth $150K and you only borrowed $50K, then at this point you would have sufficient equity to obtain a construction loan. again, your question was a bit confusing, so I hope i assumed correctly. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

13 days ago
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 7,862 contributions

Sorry.. equity is only recognized after 6 months.. not 5.. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

13 days ago
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