Questions regarding purchasing a building lot

The-DreamerNovember 5, 2013

To start, I have put a phone call into our realtor, but I have some questions I was hoping to get answered here.

My husband and I have dreamed about building a home for a very long time. Financially, we are a year or two away from being able to do so. In the meantime, a lot has gone on the market in a subdivision that we really like and for a fantastic price.

We can easily put 20% down on the lot, however, we would want to finance the remaining and pay it off prior to building on it. We have excellent credit and salaries.

My concern is, will a bank finance the lot if it will be 2 years before we build on it? Obviously, I will consult with my lender, etc. I was just hoping for some quick advice.


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Banks will finance building lots. Usually a 10 year max loan. And you have 20% down and good credit, so unless the banks are still reeling from the crash, it should be no problem.

    Bookmark   November 6, 2013 at 7:14AM
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It depends.

on the bank,
your history with the bank,
the local market for vacant lots,
the phases of the moon...

The easy way to find out is to call the bank.

& think hard about paying off that lot before you build;
if it takes 3 or 4 years to pay it off, interest rates for home loans may have gone higher.

(Builders typically don't pay off the lot before they build; they roll it into the construction loan.)

    Bookmark   November 6, 2013 at 2:19PM
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Ok, I contacted some lenders today and am just waiting to hear back from them. As for paying it off before building, that's a big reason why we would like to wait two years. We very much want it paid off first. Also, we are not talking a huge amount, the lost is listed for $29,900. We are hoping to get it for a little less than that.

    Bookmark   November 6, 2013 at 3:29PM
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