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Building a house. What to do with current mortgage?
Posted on 8/16/20 at 10:14 am
Posted on 8/16/20 at 10:14 am
I'm in the early stages of designing a house to be built, and I'm looking for guidance on the strategy for my existing house/mortgage. First off, the existing house is on the edge of family land, so do not intend to sell it.
I owe $155k on a $185k loan with appraisal of $250k from 2015. I expect to be able rent for $1500/month (we have a smaller much older house here that rents for $1250, but $1500 is no sure thing in the country) and current cost is just under $1000/month. New house will cost up to $500k, also on family land.
Should I do anything with my current mortgage prior to moving forward on a construction loan? Should I expect challenges to getting financing for the new build if I am not selling the existing house? What else should I consider in preparation for this transaction? There is no timeline on the new house, but I would like to execute within two years, if not one.
I owe $155k on a $185k loan with appraisal of $250k from 2015. I expect to be able rent for $1500/month (we have a smaller much older house here that rents for $1250, but $1500 is no sure thing in the country) and current cost is just under $1000/month. New house will cost up to $500k, also on family land.
Should I do anything with my current mortgage prior to moving forward on a construction loan? Should I expect challenges to getting financing for the new build if I am not selling the existing house? What else should I consider in preparation for this transaction? There is no timeline on the new house, but I would like to execute within two years, if not one.
3
Posted on 8/16/20 at 10:17 am to flamot1
If you carried both mortgages, what would your DTI (Debt to Income ratio) be?
Posted on 8/16/20 at 10:39 am to jimbeam
Front end DTI with $500k build and existing mortgage is 38%. I'm at 57% when I add monthly household costs. The land will be bought prior to construction, so the loan is house only. I expect the build to cost around $450k, but I don't know yet.
This post was edited on 8/16/20 at 11:56 am
Posted on 8/16/20 at 12:42 pm to flamot1
Is that other property on the same parcel?
You will have issues with traditional financing if so but out of the Box Non Qm you wont
You will have issues with traditional financing if so but out of the Box Non Qm you wont
Posted on 8/16/20 at 2:01 pm to flamot1
Do you have anyone in the family you could sell if to?
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