Trulia Voices—North Lancaster (NOLA)

Top Voices      Member Search BETA      Create a profile

Ask a question

Browse

Search

e.g.: "San Francisco, CA"
e.g.: "Parks" or "Schools"

Email me when:

RSS
 
Share this: 
  • del.icio.us
  • Digg
  • Reddit
  • StumbleUpon
  • NewsVine
 

Can I buy bare land with a lot loan and turn around and build a house on it with a construction loan?

I currently own a home in Salem with about $30k equity and am looking into buying property outside of Salem. I make just enough to pay bills and make our mortgage payment so I won't have money to put down. But I have heard that if I get a lot loan and begin construction immediately I won't need to make payments until the house is finished and final appraisal is done. Only that I will need to make interest payments but that can be itemized on the construction loan and be distributed and repaid back to the loan. I also heard that I can take the equity from the property at the end of the construction period and roll it into the loan so as to pay it down. Is all this true?
Thu Jan 10 2008, 17:21 - North Lancaster (NOLA) - Home Buying - 2 answers
 
Useful
(0)
 
 
Not useful
(0)
 
  report get email alerts email a friend
 
Corey
Home Buyer
in Salem
Corey, Home Buyer in Salem in Salem
Answers (2)
Show me:  Recent Answers     Oldest Answers     Highest Rated  
 
The Knudsens:… was FIRST TO ANSWER
What you can do depends on your credit score and finances. Yes you can purchase a property wrapped into a construction loan. They way they work is that you make payments on the draw portion only. So intially your payments are small, but they will go up as you get close to completion. There is a construction loan where you can make draws that will cover your mortgage payment (well at least there used to be) but I don't know if those program exist anymore. Many loan programs have disappeared in the past 6 months. If you are spread thin, they may not approve you. It really depends on your credit score.

Sat Jan 12 2008, 12:12
Web Reference: http://www.tomsonburnham.com
 
Useful
(0)
 
 
Not useful
(0)
 
 
report
 
FIRST ANSWER
yes you can Corey! But if you are running lean now the bank may catch that and not make you the loan. i am going to tell you in this market that they (the banks) want you to have something to lose. So you are going to need $$ down for the most part. It can sometimes work but it may not.

Good luck with that.

Regards;

Dirk Knudsen
"the Real Estate Doctor"

Fri Jan 11 2008, 01:10
Web Reference: http://www.nwhomecenter.com
 
Useful
(0)
 
 
Not useful
(0)
 
 
report
 
[+] Save this question Send this question to a friend
Permalink: http://www.trulia.com/voices/Home_Buying/Can_I_buy_bare_land_with_a_lot_loan_and_turn_aroun-18323--recent