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Iam74Gibson · Joined: 01 Mar 2010 Posts: 2 1.69 Dollars($)

I plan to use some land I bought as collateral for a construction loan... let's say for example... my land is worth $50,000 and is paid for... the home I want to build is appraised at $200,000... So I qualify for $250,000.... suppose I build the house for $180,000 and get my permanent mortgage for the $180k. Do I still need to use my land as collateral? Or, is the value of my land considered down payment and I just finance $130k?

jburke · Posted: Tue Mar 09, 2010 4:24 pm Post subject:

Hi Iam74,

The land is the collateral unless you want to invest 20%+ of your own cash.

Posted: Wed Mar 10, 2010 6:20 am Post subject:

Hi Thanks for the response... I spoke to a Wells Fargo mortgage agent who explained it all to me. Apparently, once the house is built, the land and house become one entity called "real estate" And are valued together.

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