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re: Looking to build a new home and looking for some advice on how to go about it
Posted on 1/13/23 at 12:00 pm to Powerman
Posted on 1/13/23 at 12:00 pm to Powerman
It’s really just about timing.
Either way, the land will be rolled into the construction loan/mortgage.
If you need to secure the lot now due to a hot market or specific desire, then go get it now. Also, if you want to wait a while to build, buy the lot prior to doing the construction loan.
If you can have a builder lined up and ready to build/complete within a year, do it all at once through the construction loan. Your construction loan is generally limited to a year, along with other restrictions (draws, etc).
You also mentioned cash. Either way the cash is ultimately going toward the mortgage. So from a financial perspective, you’d want the cash earning interest for you until the borrowed money is more expensive than the cost to use yours.
Either way, the land will be rolled into the construction loan/mortgage.
If you need to secure the lot now due to a hot market or specific desire, then go get it now. Also, if you want to wait a while to build, buy the lot prior to doing the construction loan.
If you can have a builder lined up and ready to build/complete within a year, do it all at once through the construction loan. Your construction loan is generally limited to a year, along with other restrictions (draws, etc).
You also mentioned cash. Either way the cash is ultimately going toward the mortgage. So from a financial perspective, you’d want the cash earning interest for you until the borrowed money is more expensive than the cost to use yours.
Posted on 1/13/23 at 12:04 pm to LSUtigerME
quote:
If you need to secure the lot now due to a hot market or specific desire, then go get it now.
Not a big issue here thankfully
quote:
You also mentioned cash. Either way the cash is ultimately going toward the mortgage. So from a financial perspective, you’d want the cash earning interest for you until the borrowed money is more expensive than the cost to use yours.
Makes perfect sense. I would want to get with a builder shortly after acquiring the land if I went that route. I'm not in a huge rush, just doing some preliminary research. I think I'm already set on the builder I want to work with, just trying to understand the process as it is new territory for me. My previous home was already under construction when I put a contract on it so didn't have to worry about the lot.
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