I need some advice with my house building/loan/PMI | TigerDroppings.com

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TIGRLEE
LSU Fan
North Louisiana
Member since Nov 2009
21522 posts

I need some advice with my house building/loan/PMI



Short of it...

House looking at building is around 300k
I have little bit over 10% of that in cash
15-20k equity in my current home
6 acre plot of land I own to build on.. appraised for 30k.

I can do a 89% loan on the consrtuction.. my banker told me most mortagage co gonna want the 20%..
Ive searched the post history and read basically every thread on here tonight about PMI and it seems most are against it..
I think Id rather pay an extra 100-200 month for PMI on my mortgage than have to come up with 15-20k out of my pocket...
30k value of land
10-15k money leftover after selling current house
60K is 20% down.. that comes to me shelling out at least 15k, prob closer to 20.

somebody that has experience with this feel free to tell me whats up.
i dont think FHA loans are avail for new construction, we make too much for RD.

Banker mentioned upon completion we could do a 95% no cash refi,.. not sure exactly what that means either.

Seems like building is far more to it than just buying.

TIA



This post was edited on 2/23 at 8:54 am



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LSUGUMBO
New Orleans Saints Fan
Shreveport, LA
Member since Sep 2005
4970 posts

re: I need some advice with my house building/loan/PMI


Ask your lender about per-paying PMI. I did it with my last refi and it saved me a couple thousand bucks. You'll bring more to closing but it's a 1 time, up front payment.we refi'd $250K on a $296khouse, so it was about the same as if you financed the house - land - equity.





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TigerDeBaiter
LSU Fan
Member since Dec 2010
2795 posts

re: I need some advice with my house building/loan/PMI


Are you not saving any money by building it yourself?

I would think that, combined with the land already owned and the cash you can put down would get you above 20%. Appraisers suck though.

What's you rough price per SF looking like, and does it compare well? That's mostly all appraisers seem to even look at.






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nogoodjr
Member since Feb 2006
292 posts

re: I need some advice with my house building/loan/PMI


Problem with the math here. Set me straight.

Land is 30k equity.
You said you had 30k cash for down payment.
Say 15k after sale of current house.

That is 75k right? Building 300k house on 30 k lot should equate to appraisal of 320-340k. 75k should be about right to eliminate pmi from the discussion.






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tiger94gop
LSU Fan
GEISMAR
Member since Nov 2004
1749 posts

re: I need some advice with my house building/loan/PMI


I am not sure about your math, but I can tell you a few things. The land is not appraised like that once it is improved. It will be compared to other homes in your areas with 6 acre tracts. That will be hard to find and will give appraisers fits. It will also give you issues with FNMA/FHLMC,because they may require an appraisal that only values one acre.

You need to do a construction loan, and if your land is paid for and you get some descent bids for the house and contract it yourself. You can save the GC's 20%, if you are handy you can do some of the work and save even more, but if you own the land you shouldn't have PMI.

You don't need to use a bank or a one time close loan, it will cost you more in rate and fees. Go to Dow FCU or another CU for the construction. THen go to a broker for the permanent. If you have PMI somebody screwed up or you just blew your budget. Also realize that if you have 6 acres, your are in a rural area and comps will be hard to find and the appraisal will be ugly as shite for FNMA/FHLMC/VA/FHA.

Try to call a Realtor to get an idea of the average house for your area, if that is your range build that. If it isn't build what you want, but be aware too big you will lose if you try to sell or finance it. It is only worth what your area can sustain. Meaning you don't build a Mansion in the middle of the hood and expect it to be worth the same as the house in the country club.







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TIGRLEE
LSU Fan
North Louisiana
Member since Nov 2009
21522 posts

re: I need some advice with my house building/loan/PMI


Im not a carpenter. Guess I worded that wrong.. Im having it built.

Id like to keep as much of my cash as I can,, have few other things Im gonna have to pay for with this deal.
SQ is around 2700-2900. Two diff houses we are considering building.






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TigerDeBaiter
LSU Fan
Member since Dec 2010
2795 posts

re: I need some advice with my house building/loan/PMI


Well I didn't really mean swinging the hammer. It sounded like you were acting as the GC though? If not, I'd consider trying that if you think you're up to it, it will save you a lot of money and hopefully get you out of the PMI, or at least decrease the amount of cash you'll have to put in to get to 20%. Best of luck.





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Franktowntiger7
LSU Fan
Member since Dec 2010
1840 posts

re: I need some advice with my house building/loan/PMI


You can do FHA and I have a lender who does 6% conventional on new construction.





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ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
6570 posts

re: I need some advice with my house building/loan/PMI


quote:

You can do FHA and I have a lender who does 6% conventional on new construction.


PMI for life of loan after April 1 FHA. If you've got a lender doing 10% down conventional take that product everytime. Pay PMI upfront and roll it loan, much less that paying monthly






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TIGRLEE
LSU Fan
North Louisiana
Member since Nov 2009
21522 posts

re: I need some advice with my house building/loan/PMI


does fha have a max limit?

It seems the conventional is gonna be our best rout, I did a constructyin loan app for DOw FCU yesterday, Im sure theyll be calling this week.






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