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Buy Lot or Lot loan

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Icon Mini Profile berlinjunk





Joined: 18 Sep 2011

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Post Posted: Sun Sep 18, 2011 7:34 pm    Post subject: Buy Lot or Lot loan
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I would like to purchase a lot to build my primary house on. The lot is $160000. I have that amount in savings plus 50% more. I'm not sure what a lender would rather see. Money in the bank or paid for lot. I have excellent credit, 6 figure income, and enough equity in my home now to pay 75% of the new construction home. With lot loan, construction loan and permanent loan my head is spinning. If I could eliminate the lot loan I would sleep better. Should I purchase the lot with my saving or obtain a lot loan or HELOC?
Thanks
Icon Mini Profile sabrinatoss
sabrinatoss
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Post Posted: Sun Sep 18, 2011 8:59 pm    Post subject:
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Confused


Is it necessary to get a loan to buy a house,.. if you don't have savings to pay with.


Idea

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lawspaws

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Post Posted: Mon Sep 19, 2011 8:20 am    Post subject: Lot Loan
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After everything is done, I believe I will need a permanent mortgage of $150000 to $200000.
My estimates to build are- Lot $160000
Contruction Loan est - $450000 to $500000
(haven't put bids out yet)
New Home should appraise after finish of $650000 to $750000.
Comps in neighborhood range from $650000 to $950000.
Talking with 2 lenders now, one says save cash and get lot loan, the other says pay cash for lot. Still confused.
Icon Mini Profile adonis
adonis




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Post Posted: Tue Sep 20, 2011 7:18 pm    Post subject:
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Hi lawspaws,

In my opinion, you can pay cash and buy the lot and then take out a construction loan in order to build a property on it.

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Lawapaws

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Post Posted: Fri Sep 23, 2011 9:10 am    Post subject: Lot Loan
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Thanks for the response. Lenders are telling me that having the cash in the bank is better for loan qualification vs using owned lot as collateral. Any thoughts?
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