Ex-spouse owes her a house
Ask Dr. Don by Don Taylor, Ph.D., CFA • Bankrate.com

Dear Dr. Don,
I currently own a home in Gulf Breeze, Fla. I owe $103,000 and the
value of my home is $225,000. From my divorce court order, I am to buy
a piece of land and the ex-husband is to build me a house and pay for
all expenses. I am looking to buy land in my home town of Santa Cruz,
Calif., which is very expensive for land. I plan to never live in the
new home -- just sell it and use the profit for other investments. Can
I get a loan for bare land? Please let me know ASAP so I know what my
options are.
Thank you.
-- Marion Mansion

Dear Marion,
Getting a loan for a piece of land isn't all that difficult,
especially if you plan to build a house on the property in short
order. An earlier Dr. Don column has a lot to say about borrowing to
finance land.

I searched the Multiple Listing Service listings for lots in Santa
Cruz County, and saw lots priced anywhere from under $100,000 to more
than a million dollars. I get the impression that a home equity loan
against your house in Gulf Breeze isn't going to buy much more than a
down payment on a land loan for the lot that you want.

As I understand your letter, the ex-husband pays for the house that
will be built on the property. I hope he's paying cash, because
financing the home is the bigger issue here. If his name in on the
mortgage, your name is on the deed, and a lender has a lien on the
property, all three parties are taking a pretty big risk.

There has to be a simpler approach to the terms of this divorce decree
than what your attorneys have cobbled together with this deal. Between
the real estate commission, loan fees and taxes, there's a lot of
financial slippage in your getting a home built in Santa Cruz just to
sell it for the money.

-- Posted: Aug. 8, 2005

http://www.bankrate.com/nltrack/news...20050808a1.asp


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