As others have indicated, you need to proceed very carefully in order to protect yourself from any liability here. Probably the answer will be to proceed with a construction/rehab loan unless you have the equity to take out a line of credit sufficient for the work to be done. However, to properly advise you I would need to get into more detail regarding the specifics of the situation.
I am available to help you at your convenience if you wish.
I can do a full underwriting approval ahead of time if need be and I also offer credit score improvement programs for free while we work on your mortgage.
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Robert L. Hanson
Gladewater National Bank
First Time Homebuyer Specialist
If you are wise, your first step is to ask a local REALTOR for help. If you have an area or builder in mind, that's great. It saves a little of the legwork, but not much. You need someone who is representing only you - and the builders in our area will typically cover our fee, so that service is not an expense to you. There are lots of places that a build job can go awry. Not to scare you off from building - but I've seen on-site builders melt-down from overwork and quit mid-job, sales reps for the builders get cases of amnesia regarding conversations that took place but were not documented, builders go bankrupt 12 weeks before the completion of a new home, loan programs dry up, and buyers who split up and decide to divorce mid-construction. Oh, and these are scenarios I've seen and had to overcome personally for clients. I would not recommend that anyone just pick a builder, sign their contract, and hand over their money without the representation of a good, local agent.... more