Quote:
candyman-
We have recently sold our house and want to build in the spring. We are currently renting at half the cost of our previous mortgage to save for the down payment costs of a construction loan. I also plan to purchase property now, hopefully Land Contract, to lower the land cost when rolling it all into a construction loan.
Any pointers? Suggestions?
Are VA loans any good for building? My previous realtor and mortgage officer stated there is a moutain of paperwork to go through and it ends-up not being very beneficial (interest is higher). Is that true?
Is there any way around having 15-20% down to start construction?
I am sure there is more, but I deeply THANK YOU for sharing your knowledge. If there is anything I can do for you, please let me know!
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I would suggest the obvious... Save... Save your butt off.
I am not sure if I would suggest purchasing land now. If you already have a plot picked out and want that specific one, maybe you should, but If you don't, I wouldn't actively look for one.
Instead of making that extra payment each month, I would suggest putting in in some type of savings vehicle until you are ready to start the construction. Better to
earn interest than
pay interest, no? As long as you save that payment each month, you will actually have less debt at the start of construction than purchasing that land now.
As far as VA Loans go, I am not too familiar with them, but I think you said the answer yourself. "My previous realtor and mortgage officer stated there is a moutain of paperwork to go through and it ends-up not being very beneficial" Your realtor and mortgage officer make commisions if you work through them, the only way to find out for sure is to check. Although there may in fact be "a mountain of paperwork," it'll be worth it if it'll save you thousands of dollars. And besides, aren't first mortgages always a mountain of paperwork?
As far as the 15-20% down, I believe that it depends on the instituion that you go through. It is probably a very wide-spread practice, but you may be able to find that "odd" institution that doesn't require it.
As with all construction, I don't know how handy you are, but if you can do it yourself, do it, it'll generally save you a ton of money. Even if you are not to handy, it will probably be a lot cheaper to hire your brother-in-law or a friend to do some of the work than contractors.
One of my co-workers recently built a home, (doing much of the work using with her husband and brother,) and although the loan was only $114,000 dollars, by the time they were finished the appraisal came back at just under $250,000. Not bad for a little old fashioned elbow grease.
Finally, as far as doing something for me, a simple "thanks" will suffice, unless of course you feel like joining my army in "The Other Revolution" If so, I would be greatful, and all you have to do is click this link ----->
Join the Other Revolution and the directions are there.
If you have any more questions, let me know.
Thanks for posting!