Land used in getting loan for new house

Because you have "equity" already. If your land is worth $30,000 then you have 30 grand worth of equity which counts towards the amount of "down payment" for the home.

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When I go seek a loan, the bank will look at it as if I have $50,000 total for a down payment?

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Depends on what the land appraises for. But pretty much yes. Because when you build, they attach the land to the loan. You are basically mortgaging the home and the land. If you default, your land goes to the bank.

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Is this something the bank wouldve told me or not?

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More than likely it would have come up when you applied and told them that you own the land outright.

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When you say "in your name" do you own the land out right or are you paying on it still?

Also, I assume you will be geting a construction loan to build the house. You really dont put a down payment down on a construction loan. An appraisal of the land and you house plans will determine the value of the property. This value will be land and house. Your loan will only be for what you need to build the house.

After you are complete you will do permanent financing. You could then choose to put a down payment down plus have the equity of the land to deterime your loan to value ratio.

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This also depends on the size of the tract I think. Isn't their a limit to the size because of homestead exemption? You can't just build a house on 40 acres or more and expect to get a break on the taxes for the entire parcel. I think they request you to resurvey and cut out like a 5 ac. max sized piece to attach to the home. This in turn can affect the value of the collateral.

Another option would be a multiple indebtedness mortgage where you finance the home, the newley resurveyed lot, and the remaining acerage to put up more value.

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Can I then take what the appraisal of the land is and use that as part of my down payment right?

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Correct. But by putting it up you run the risk of losing it if you default. Everybody means well, but you would be suprised how many sheriff sales and dation en paiments are filed every year.

What I'm saying is, if you paid off the property you should be doing well enough to come up with the down payment seperately. If it is inherited family land, are you willing to risk losing it so you can build on it? Basically, make sure you are stable finacially, and don't put it up just because thats the only way to make it happen. That's a formula for default if you go unemployed or have serious unexpected expenses.

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because I had "collateral" to put down along with my down payment.

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It's not collateral. It's equity. The land has to be the land that you're building the house on. Otherwise it's just an asset.

When I built my house last yr, the bank was only concerned that I had 20% to put down on the pre build appraisal of the house, regardless of the fact that I had already pretty much paid off my lot.

Correct. Hard to get the banks house off your land

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You are going to be forced into including the land. The bank doesn't want to own a house if you default while you still keep the land. Eventually, it's all going to be part of the loan.

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If possible you could subdivide the 2 acres and put the house on a half acre lot and have 1.5 acres of land free from the home mortgage. But then the value of the 1.5 acres will be an asset and will not count as equity for the home mortgage.

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You are going to be forced into including the land.

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That's right. You own the lot, together with all improvements. Now if it's a lean to shanty or a 5000 sq. ft. home makes all the difference in the value of the lot. Thus when buying a pre-existing house it only references the lot # on the deed with no specifics of the improvements.

Financing a build, you have to put up the lot and aquire something like a future obligation credit line. They'll offer a max amount like $500,000. Then your loan will be based off the agreed price from the builder.