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Building a House with Lines of Credit
Posted on 11/1/14 at 8:36 am
Posted on 11/1/14 at 8:36 am
Have a family member who offered to put up his home to Get me a line of credit to build mine. I need about $400k for the build.
Any downside to doing this? Will I be able to get a Mortgage when I'm done to pay off his line? Seems like I would save a ton on closing costs and I would be able to shop the mortgage around in a year when the job is finished.
Any downside to doing this? Will I be able to get a Mortgage when I'm done to pay off his line? Seems like I would save a ton on closing costs and I would be able to shop the mortgage around in a year when the job is finished.
This post was edited on 11/1/14 at 8:38 am
2
Posted on 11/1/14 at 9:50 am to Rev1897
I don't know a ton about this, but I believe you'll have to start paying on the LOC before the house is finished. Are you paying a house note/rent now? If so, will you be able to afford both notes? Seems like a dicey situation- especially if something happens to the house your borrowing against during that 1 year period. I'd just go the conventional route and get a construction loan
Posted on 11/1/14 at 10:26 am to Rev1897
There will be no upside to this, if you are building a 400k house you should be able to qualify for traditional financing, don't invole your family in this endeavor
Posted on 11/1/14 at 11:18 am to Tigerpaw123
Yea, the traditional financing route is not as easy but will get it done ultimately, I think.
Posted on 11/1/14 at 12:05 pm to Rev1897
A construction loan is basically a line of credit. I wouldn't want to owe a family member that much money though.
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