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[email protected] trader4@optonline.net is offline
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Default Buy land and trailer, then build home? Mortgage questions...


wrote:
"Rick Blaine" wrote in message
...
krw wrote:

Owning land prior to building
isn't normal these days. I've heard many contractors won't go
there (building on property _they_ don't own title to).


Assuming you want the contractor to do the construction financing, it's
normal
enough, but the process has changed. You now have to sign over title to
the
property while the home is under construction.

What that does it put the burden of prosecution on you if anything goes
wrong.

????? Never heard of such a thing, and I grew up in the business, and my 80
YO father is still designing custom houses for rich doctors and such. A
custom house on customer-owned land is quite routine.

Now a McBuilder, on the other hand, who makes as much money from the finance
division as the actual construction, may have their own silly
profit-enhancing and risk-reducing rules. IMHO, only a damn fool would sign
over land they already own. Putting the land up as security for the
construction loan is not the same thing as signing it over. Most McBuilders
only build on land they own because they only want to do subdivisions, and
they don't wanna get in title fights if a buyer gets cold feet, goes
bankrupt, or dies, while the place is half-built. A real custom builder, and
a competent loan department at a real bank, will have NO problem setting up
financing that protects everyone, doing a custom house on customer-owned
land.

aem sends...



I agree. And if you sign over the property to a builder and the
builder goes kaput, you're in big trouble. If you sign over title to
a $200K piece of land you own, is the builder going to give you $200K
for it? I'm sure that would go over swell. Like the builder just has
spare cash or is eager to take out loans he doesn't need to. Then
there are the tax issues. If you bought the land years ago for $50K,
and you change title over to the builder for the $200K, you now owe
capital gains tax. Also, many areas have realty transfer taxes that
come into play. All in all, I can't see this making any sense.