The low monthly payments that are available with balloon lot loans are quite tempting, but you might want to reconsider your options before signing on that dotted line. These types of lot loans and land loans used to be very popular many years ago, and while their popularity is fading fast, they are still an option that is given to those who want to make a purchase but do not want a huge mortgage.
While utility and infrastructure matters might be easier to confirm if you are buying a finished lot for sale in a recently developed or established community there is more to keep in mind. Your construction agreement with your builder can cover many of the things you need. On the other hand, you should know about how things may impact your plans and costs. It is even more important if you are buying a vacant lot for your home without a specific builder in mind.
REQUEST A LOAN OFFICER NOW In case you are not aware of this small fact, choosing a rural piece of land to build your perfect home is going to have additional costs. You need to make sure that you factor in the costs of a few extras, like a well and septic system, so you do not exceed your construction budget. Many people forget to factor those items into their costs, as they forget that these areas are not hooked up to any municipal wastewater or regular water systems.
REQUEST A LOAN OFFICER NOW Anyone who is considering purchasing a plot of land will need a way to pay for it. While a few select people may be able to pay cash for their new land, most people will need to obtain a land loan for their purchase. Land loans are basically financing, similar to a home mortgage, and you can obtain them from either a bank or a lender.
REQUEST A LOAN OFFICER NOW Appraisals are necessary for any type of loan, because after all, lenders need to know that they can get their money back if someone defaults on their payments! Without an appraisal, a lender would not know if the item was worth the amount that a person wanted to take out a loan for, and while that could be bad for the lender, it can also be bad for the borrower when they go to sell in the future.
REQUEST A LOAN OFFICER NOW When comparing fixed contracts and cost plus contracts, there are major differences that even the most oblivious person will notice. Let’s start by talking about cost plus contracts. These contracts will give you an amount that you will need to pay for a specific amount of labor and materials for your new home construction. However, that cost is most likely to rise if anything not listed comes into play.
REQUEST A LOAN OFFICER NOW Purchasing a home can be an intimidating process, so you can only imagine how difficult constructing a home is going to be. While you will need to participate in the entire design process for your new home, there is one item that you must do before you can begin anything else. That one item is finding a residential lot or some land that you can purchase, so that you have a place to actually build your new home.
REQUEST A LOAN OFFICER NOW When you are trying to determine whether or not you will need a PERC test, you will need to know whether or not your lot is improved or not improved. Since you probably have no idea what the difference is between those two, let us explain! An improved lot is normally defined as a part of a subdivision or a lot that has a well and septic tank installed right there and they are both in working order.
REQUEST A LOAN OFFICER NOW Some people would rather build a home from the scratch than buy an already existing property from the market. A new home construction gives you the opportunity to customize the designs and add particular features to make your home more comfortable and beautiful. While this sounds very attractive, securing the lot and land loan to achieve this dream may not be very easy. Don’t be too quick to blame the lenders, in this post we will discuss some of the reasons lenders tend to prefer providing loans for the purchase of existing homes rather than ‘bare land’ for new home construction.
REQUEST A LOAN OFFICER NOW There are two types of loans that you can consider when purchasing land and constructing a new home. Those two loans are the lot and land loan and home construction loan, and each one is unique with what it offers. Of course, your available options will be determined by your personal circumstances, how prepared you are, what you are purchasing, and when you will be completing the construction process.