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Buy land and trailer, then build home? Mortgage questions...



 
 
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  #1  
Old November 12th 06, 06:59 PM posted to misc.consumers.house
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Posts: 2
Default Buy land and trailer, then build home? Mortgage questions...

Hello all. I'm looking for some advice. I currently rent (and I'd be
embarrassed to tell you how much I pay each month in rent), I'm a young
guy wanting to buy. The route I'm looking into is purchasing a plot of
land (maybe half an acre) and getting a mobile home (1 bedroom and
cheap will suffice), then while waiting in the mobile home, have my
real home constructed on that property. Now for a few figures:

I estimate that my mortgage payment on the land and trailer would run
about $500 less each month than I am currently paying for rent. I want
to get a construction loan to build the home. Should I get the
mortgage for the land and trailer first or would a reputible bank be
able to combine the two. Obviously, I want to make payments from the
get go, so there is no deferred interest to deal with later on. How do
these loans work? Would I start paying a little more each month as I
complete steps in building the home? Do I need two separate mortgages?
One for the land/trailer and one for the construction of the home?
What is the best route to take to avoid deferred interest and have a
regular mortgage once the home construction is completed? (I would
then sell my mobile home for whatever I can get out of it)

Any advice is emmensely appreciated!

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  #2  
Old November 12th 06, 10:09 PM posted to misc.consumers.house
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Posts: 180
Default Buy land and trailer, then build home? Mortgage questions...

You've got a lot of concepts bundled together. Why not just buy a
house when your lease is close to being over with ? It's a buyer's
market in most of the US.

What your describing - buying a trailer to live in on the land while
your home is built - involves a lot of overhead expenses. A quick home
build is 3-4 months, why buy a trailer ?

  #4  
Old November 12th 06, 11:34 PM posted to misc.consumers.house
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Default Buy land and trailer, then build home? Mortgage questions...

I think it depends in part on your priorities. My aim is to get to
where I have a home that's refurbished to my tastes but I don't have
the $$$ or motivation to go the full custom route. If that's what you
want and you have the moolah, that's cool.

Depending on where the lot is, a mobile home may be a no-no, zoning
wise.

I'm trying to think of who could help you, somehow it would help to tap
into people that have built custom. If you do a full custom thing, a
realtor may or may not be any help, a good one can look at land and
advise you on all the practicalities of this dealie.

I suggest first looking at your assets and the appx cost of land and
custom homes where you are. Here (midwest US - cheap !) a half acre in
a decent area but not a subdivision can be 50 grand. More if you have
to run utilities. A house by a to-order builder (not a tract home)
will be ... hmmmm... 100-150 a sq foot ? (Out of my league here.) So
say a quarter million for an average size house with half acre. You
need 20% of that in cash using a conservative approach.

People do this all the time. Builders will be VERY happy to talk to
you of you go this route.

  #5  
Old November 13th 06, 11:56 PM posted to misc.consumers.house
DT
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Posts: 342
Default Buy land and trailer, then build home? Mortgage questions...

I know a few people who have sone just what you want to do, live in a mobile
while building the house, then sell the mobile. It worked out just fine. But be
aware that many banks require you to own the land outright before they will
lend construction money.

--
Dennis

  #7  
Old November 14th 06, 05:56 AM posted to misc.consumers.house
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Posts: 455
Default Buy land and trailer, then build home? Mortgage questions...

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.
  #8  
Old November 14th 06, 08:49 AM posted to misc.consumers.house
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Default Buy land and trailer, then build home? Mortgage questions...

I'm with Roger. If you're renting now, I don't see the compelling need
to make things even more complicated by buying a trailer to live in and
then selling it. A house can be built here in NJ, which isn't noted
for speed, in 8 months. Why can't you just continue to rent?

Then you need to work with a bank that will give you a construction
loan. They hand over the money in stages as the work is completed.
Then, at the end, it gets refinanced with a conventional mortgage. As
someone pointed out, banks like to see the land either paid for, or
else at least a substantial amount of money put into it.

I think the best advice is the comments made by someone else. There is
a glut of homes on the market just about everywhere in the US right
now. At the same time, I don't think construction costs have changed
much. Which means you have plenty of time to find a house you like
and get it at what I think will be a better deal than going through the
construction process.

Some other things to consider. If you go new construction, are you
going to pay someone to build and deliver the house or are you going to
act as the general contractor, controlling the project, hiring subs,
etc. If it's the latter, I think anyone doing it for the first time
is going to be in for a lot of expensive surprises. If you haven't
done this before, there are lots of mistakes you;'re going to make that
are going to cost you time and money.

So, I think finding a house that is very close to what you would want,
and then perhaps making some upgrades,.like maybe a new kitchen, etc
that customize it to what you want is an easier, safer, and also
perhaps better deal $$$ wise.

  #9  
Old November 16th 06, 01:30 AM posted to misc.consumers.house
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Default Buy land and trailer, then build home? Mortgage questions...


"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...


  #10  
Old November 16th 06, 02:36 PM posted to misc.consumers.house
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Posts: 4,505
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.

 




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