If you own land, can you use that as a down payment for a mortgage?
Written By: admin on June 13, 2009
One Comment
We have an acre of land. Will we still need 20 percent down (cash) to avoid paying personal mortgage insurance. Can the land represent more than 20 percent down?
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Tags: acre of land, insurance, land mortgage, mortgage insurance, personal mortgageTags: acre of land, insurance, mortgage insurance, personal mortgage
althoug they are partially right first of all lets start form the begining.
If you own the land and you try to get a construction to perm loan your loan would be on the construction and it would be less than the mortgage.
your land value would be considered into the apprised value your loan would be less then the appraised value with a completed home on it.
you would be looking for a construction to perm loan! they loan you the amount of the construction then once the home is completed it converts to a mortgage. during construction you only pay for the money thats out during the build.
the you would probably not be looking for 100% financing if the property appraises for more than the cost of construction. and in most cases it does! if you own the land outright you should have no problem getting financing.
what you need ot find out is what would be the value of your property with the house you plot to place on it.
the value of the land would be considered in your favor!
most lenders will lend against the value of the home completed
simply place if you build the house for 100k and the home on the land is valued at 155k you are only borrowing 66% LTV