Posted on: 24th May, 2010 01:16 pm
My situation is I have recently built a home. I have owned the land the home was built on for over a year. I borrowed the money short term from a corporation that I am part owner of. I chose this alternative to a construction loan because there are no fees. The loan is a personal one to me with no liens. Now I want to get a long term mortgage. What is the best way to proceed?
in this situation, a cash out refinance would be a pretty straightforward transaction, if you are qualified for the loan and the house appraises high enough over what is owed on the current mortgage.
cash out refinances generally will allow up to 80% ltv based on the appraised value of the home, or the lesser of the construction cost / acquisition cost if it has been less than a year since you purchased it. since you have owned the land for more than a year, there should not be any problem with the seasoning of your ownership in it. however, if the home has recently been completed, you may be limited to the acquisition cost ( the actual cost to build the home ) plus the value of the land in the determination of the value that you will be allowed to borrow on.
you may not be able to borrow and take cash out for the total amount you owe the corporation, but that would be based on a lot of specific factors that can't be answered here. find a good broker or lender in your community who can advise you for the specifics of your situation.
cash out refinances generally will allow up to 80% ltv based on the appraised value of the home, or the lesser of the construction cost / acquisition cost if it has been less than a year since you purchased it. since you have owned the land for more than a year, there should not be any problem with the seasoning of your ownership in it. however, if the home has recently been completed, you may be limited to the acquisition cost ( the actual cost to build the home ) plus the value of the land in the determination of the value that you will be allowed to borrow on.
you may not be able to borrow and take cash out for the total amount you owe the corporation, but that would be based on a lot of specific factors that can't be answered here. find a good broker or lender in your community who can advise you for the specifics of your situation.