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#1
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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! |
#2
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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 ? |
#3
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Buy land and trailer, then build home? Mortgage questions...
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#4
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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
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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 |
#6
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Buy land and trailer, then build home? Mortgage questions...
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#7
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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
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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
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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
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Buy land and trailer, then build home? Mortgage questions...
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