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How does it work for taking out a loan for land and construction?

Looking to buy both the land and construct a home for $250000 alltogether. Could I put 30% but not build for a year? What loan works for this scenario? by themer326 from Opp, Alabama. Feb 9th 2021 Reply

Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 2,300 contributions

In today's climate, there are no lenders that I am aware of that will do what you want. Those that are lending in the one-off construction market will only do the land with the construction and there are strict time limits on how long you have to start construction and complete it. If you need/want to tie up the land, and then plan for the construction in a year, you are going to either have to pay cash for the land or find a local bank that specializes in land loans. Then when you are ready to start construction work with a locally licensed Mortgage Broker to help you put together a construction loan. The Construction lender will probably give a credit for the equity in the land as part of your equity requirements, they usually do. ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ Licensed in AZ, CA, GA, IL, OR, WA... In fact, NEXA is licensed in all states except MA and NY and we are pending approval in VA, so give us a call. ~ 480-889-9000.

Feb 9th 2021
Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,409 contributions

Typically you will get two loans. The first is a short-term construction loan that is usually for 12 months or less. When the home is completed, you will typically now pay off the construction loan with your long-term end loan, like a standard 30-yr fixed. 30% down and good credit, and you should be just fine. Learn more about construction loans at - Cambria Mortgage, NMLS 274132. I lend in MN WI IA ND SD.

Feb 12th 2021
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