- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Question about building a custom home in BR re: financing
Posted on 12/21/15 at 9:44 pm
Posted on 12/21/15 at 9:44 pm
I need to get some opinions from those outside of the industry that only serves to benefit by going with their advice.
At this point we do not own the lot, but we are looking to build custom home. Chose a builder and he would be willing to buy lot, finance build himself, but with a 10% down payment from us. Couple things:
1) we negotiated this down to about 7% but it's still a pretty large figure. Instead of draining a savings, we were told it would be better to do a HELOC with Iberia on current home. As long as current home appraises for the comps our realtor ran, this should be plenty for down payment plus some after sale of home.
2) Met with a few local lenders. Assurance, Essential, and Area Home Lending. Their advice was all similar: If builder is willing to both buy lot and finance build, you should do that versus construction loan. He would be taking risk with a home drawn and built from the scratch of my messed up brain, so I understand the hefty down payment.
Sorry if this was unorganized and jumbled, but this all seems intimidating and scary as shite. It makes me want to stay in my current home, but unfortunately we have outgrown the place and need a more suitable long term arrangement. What are the opinions of the aforementioned situation? Do builder finance with huge down payment but less headache by eliminating construction loan process? HELOC for initial down payment to maintain our liquidity?
At this point we do not own the lot, but we are looking to build custom home. Chose a builder and he would be willing to buy lot, finance build himself, but with a 10% down payment from us. Couple things:
1) we negotiated this down to about 7% but it's still a pretty large figure. Instead of draining a savings, we were told it would be better to do a HELOC with Iberia on current home. As long as current home appraises for the comps our realtor ran, this should be plenty for down payment plus some after sale of home.
2) Met with a few local lenders. Assurance, Essential, and Area Home Lending. Their advice was all similar: If builder is willing to both buy lot and finance build, you should do that versus construction loan. He would be taking risk with a home drawn and built from the scratch of my messed up brain, so I understand the hefty down payment.
Sorry if this was unorganized and jumbled, but this all seems intimidating and scary as shite. It makes me want to stay in my current home, but unfortunately we have outgrown the place and need a more suitable long term arrangement. What are the opinions of the aforementioned situation? Do builder finance with huge down payment but less headache by eliminating construction loan process? HELOC for initial down payment to maintain our liquidity?
1
Posted on 12/21/15 at 9:50 pm to tigerbandpiccolo
I'd find a way to buy the lot. I would think you could find a way to put 20% down and still be less than the 7% he wants.
The builder holds all the cards if its in his name IMO. Now, if this is just one of many lots in a neighborhood, than maybe reconsider. How custom are you talking?
The builder holds all the cards if its in his name IMO. Now, if this is just one of many lots in a neighborhood, than maybe reconsider. How custom are you talking?
Posted on 12/21/15 at 9:59 pm to TigerDeBaiter
There are about 5 lots out of 20 left. It's absolutely the location we want, which is why we are building a few years earlier than we had planned. Just don't want the location opportunity to slip. One of the homes is almost complete and will be in parade of homes this spring. We think once that happens any remaining lots will be purchased.
Very custom, as in design and layout from scratch with architect, and every material approved by us. There are no spec homes in this neighborhood, only custom with extreme restrictions. And that may turn many people off, but coming from prairieville-the land of no zoning and too few restrictions--we welcome it.
Very custom, as in design and layout from scratch with architect, and every material approved by us. There are no spec homes in this neighborhood, only custom with extreme restrictions. And that may turn many people off, but coming from prairieville-the land of no zoning and too few restrictions--we welcome it.
Posted on 12/21/15 at 10:08 pm to tigerbandpiccolo
quote:
There are about 5 lots out of 20 left. It's absolutely the location we want, which is why we are building a few years earlier than we had planned. Just don't want the location opportunity to slip. One of the homes is almost complete and will be in parade of homes this spring. We think once that happens any remaining lots will be purchased.
This is what I was thinking when I said it may be best just purchase the lot yourselves. If there is a falling out with the contractor, I would think it would be tough to "fire" him and end up with the land. Maybe I'm wrong, but something to consider when they property is what you are primarily after.
quote:
Very custom, as in design and layout from scratch with architect, and every material approved by us. There are no spec homes in this neighborhood, only custom with extreme restrictions. And that may turn many people off, but coming from prairieville-the land of no zoning and too few restrictions--we welcome it.
Good! There are a time and place for each, but custom one of a kind homes with attention to details and materials are much more rewarding to everybody involved.
Posted on 12/21/15 at 10:15 pm to TigerDeBaiter
Thank you for your input! I will consider and inquire about this when he sends over the paperwork.
Posted on 12/21/15 at 10:17 pm to tigerbandpiccolo
Good luck with the build, whatever route you go. 
Posted on 12/21/15 at 10:42 pm to tigerbandpiccolo
We have built 2 homes.We used a builder for the 1st and I was the contractor for our current and final home. The 1st one was in a nice subdivision in Watson. We bought the lot,had the plans drawn and got hardmoney bids for a turnkey home. We used Bank of Zachary for that project. The builder gave us a figure and allowances for the different things.He got 5% upfront and broke it down to 5 draws. The last draw was payable once punchlist items were complete.We included in the contract that he was responsible for construction loan interest after 7 months. It took almost 9 months and he took almost 2500 off the money owed for overages. Just something to think about if you own the lot.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News