Can I Buy Land and Build a House At the Same Time?
The prospect to buy land and build a house at the same time is exciting for the homeowner. Investors like this project too. However, in the eyes of the lender, the project contains risk at most steps of the process. The more financing you provide, the more freedom you’ll enjoy. From the lender’s perspective, it’s best to purchase the land first. Then build the home.
We provide some things to consider for this project.
House and land loan packages exist. They differ from construction loans, which include their own set of requirements and parameters. It’s possible to procure up to 95% of the total project’s value in funding if you agree to buy the land first and build the home later. Lenders consider lending up to 90% of the project’s value to those who plan to build a turnkey property.
If you walk into the project with a guarantor, it’s possible to obtain up to 100% of the project’s value.
For home and land loans, building the home is the riskier part. Purchasing the land carries little risk, such as the deal falling through. Once you obtain the land, it retains minimum value in all market conditions. However, a home may never be realised because permits are denied, costs increase significantly, or the owner abandons the project.
Buy Land and Build a House at the Same Time Conclusion
Our Mortgage House loan specialists consult with clients interested in the possibility to buy land and build a house at the same time. We provide them with the tools to assess the project. Then they render potential home loan rates terms, requirements, and parameters. For more information, contact Mortgage House today.