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Old 02-24-2014, 08:53 AM
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Hi everyone. Iv got a couple quesiton that Im sure some of you have some experience in and my offer some suggestions. I little about my situation with out getting too personal and try not to leave important information out. My wife and I are looking to build a house. We found a nice piece of property in our area(Delaware) that is 13 acres for 70k. We've searched all over and can not come close to the any other lots for the price. The builder owns the property and we have come to an agreement on the house and plans.. a little back story. 6 years ago we decided to try and have kids but we had fertility issues and to sum it up basicaly spent 40k on credit cards and loans for treatments and surgerys and now have 2 beautiful kids. No regrets. We finially got all that paid off last yr. Which is one of the main reasons we are looking to get away from the bigger towns and crime. I have never bought a house so I could go tomorrow and buy one with all the programs available for that situation but we would more than likely be in a development with only .2 to .5 acres of land and no room for the kids.

Ok, we have a good amount saved for a down payment but there doesnt seem to be , or alteast I cant find any, programs to assist with down payments for new contruction loans? Most require that the structure be already built with a certificate of occupancy. Most banks that I have talked to either require a 25-30% down or they do not do new contruction loans. Iv searched and searched , I know google is your friend, but Im just not finding anything out there. I just dont know if Im searching for the right thing.

I also know Im doing the right thing by working my azz off and trying to get my family a better life (just like most people) but it almost seems that if you do that and do what your supposed to do then there really isnt any help for you.. Ofcourse thats a different topic on its own. Anyway, any help or suggestion would be greatly appreciated as I dont want to settle since this is were we intend to spend the rest of our lifes and raise our children there. Theres nothing wrong with buying a house already built in a development but its really not were our hearts are set. If you want to PM me for more info thats fine too. Thanks for your time

EDIT: Some people have pointed out that it seems im looking for free money. Im not looking for free hand outs. Im just looking to see if theres anything out there that doesnt require such a large % down payment with new construction loans since Ill be paying for it anyway in the end

Last edited by tomsws6; 02-24-2014 at 09:51 AM. Reason: misleading
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Old 02-24-2014, 09:25 AM
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Originally Posted by tomsws6 View Post
Hi everyone. Iv got a couple quesiton that Im sure some of you have some experience in and my offer some suggestions. I little about my situation with out getting too personal and try not to leave important information out. My wife and I are looking to build a house. We found a nice piece of property in our area(Delaware) that is 13 acres for 70k. We've searched all over and can not come close to the any other lots for the price. The builder owns the property and we have come to an agreement on the house and plans.. a little back story. 6 years ago we decided to try and have kids but we had fertility issues and to sum it up basicaly spent 40k on credit cards and loans for treatments and surgerys and now have 2 beautiful kids. No regrets. We finially got all that paid off last yr. Which is one of the main reasons we are looking to get away from the bigger towns and crime. I have never bought a house so I could go tomorrow and buy one with all the programs available for that situation but we would more than likely be in a development with only .2 to .5 acres of land and no room for the kids.

Ok, we have a good amount saved for a down payment but there doesnt seem to be , or alteast I cant find any, programs to assist with down payments for new contruction loans? Most require that the structure be already built with a certificate of occupancy. Most banks that I have talked to either require a 25-30% down or they do not do new contruction loans. Iv searched and searched , I know google is your friend, but Im just not finding anything out there. I just dont know if Im searching for the right thing.

I also know Im doing the right thing by working my azz off and trying to get my family a better life (just like most people) but it almost seems that if you do that and do what your supposed to do then there really isnt any help for you.. Ofcourse thats a different topic on its own. Anyway, any help or suggestion would be greatly appreciated as I dont want to settle since this is were we intend to spend the rest of our lifes and raise our children there. Theres nothing wrong with buying a house already built in a development but its really not were our hearts are set. If you want to PM me for more info thats fine too. Thanks for your time
Not trying to come across as harsh, but you are buying a 13 acre piece of land and having a new home built.... exactly how much "help" should you get? And, who should help you?

Honestly, your kids will be fine on "only" half an acre. Also, those "developments" often have lots of other kids and playgrounds and sidewalks...
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Old 02-24-2014, 09:29 AM
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with only .2 to .5 acres of land and no room for the kids.
How big are your kids that they can't fit on an 1/2 acre lot?
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Old 02-24-2014, 09:35 AM
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Originally Posted by Humanoid 2.0 View Post
How big are your kids that they can't fit on an 1/2 acre lot?
I grew up, along with 2 brothers and 2 sisters, in a house that was on a .33 acre lot. Had plenty of room even with the in-ground swimming pool.
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Old 02-24-2014, 09:37 AM
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Originally Posted by Humanoid 2.0 View Post
How big are your kids that they can't fit on an 1/2 acre lot?
That's cold....
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Old 02-24-2014, 09:39 AM
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Originally Posted by lionsfan5454 View Post
Not trying to come across as harsh, but you are buying a 13 acre piece of land and having a new home built.... exactly how much "help" should you get? And, who should help you?

Honestly, your kids will be fine on "only" half an acre. Also, those "developments" often have lots of other kids and playgrounds and sidewalks...
Ok, the more I reread what I wrote I guess I should have worded it differently. My understanding is , and I could be wrong , but with first time home buyers programs it usually requires 5-8% down instead of the 25-30% down on conventional loans. Now with new construction loans Im not finding anything like that. Im just wondering if theres anything out there like that. Im not looking for free hand outs. I have no problem paying for what I have and what I want. In the end I would be paying that money anyway so it would not be given to me for free. Im looking for something that does not require that large of a down payment is all. I dont think theres anything wrong with that since I would be paying it regaurdless.

And I dont think yor being to harsh as I asked the question here on an open topic forum. In the same respect who is anyone to say that my kids will be fine and what is wrong with wanting more for them? Gods not making anymore land , unless you live in Hawaii , so this could be a small long term investment for when Im dead and gone that will go to them. I do appreciate your reply though
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Old 02-24-2014, 09:40 AM
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Originally Posted by Humanoid 2.0 View Post
How big are your kids that they can't fit on an 1/2 acre lot?

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Old 02-24-2014, 09:40 AM
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Originally Posted by Gordon Shumway View Post
That's cold....
Well can always drive a double wide to his 13 acres and live in it. Not sure why the OP expects there should be programs to help him build a new home on a his huge lot. Should have taken the 70k and used it to buy an existing home, would have no issues with a mortgage then.
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Old 02-24-2014, 09:44 AM
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Originally Posted by Humanoid 2.0 View Post
Well can always drive a double wide to his 13 acres and live in it. Not sure why the OP expects there should be programs to help him build a new home on a his huge lot. Should have taken the 70k and used it to buy an existing home, would have no issues with a mortgage then.
Sure , no problem...We'll have a party

"Im just wondering if theres anything out there like that. Im not looking for free hand outs. I have no problem paying for what I have and what I want. In the end I would be paying that money anyway so it would not be given to me for free. Im looking for something that does not require that large of a down payment is all. I dont think theres anything wrong with that since I would be paying it regaurdless."
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Old 02-24-2014, 09:53 AM
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Originally Posted by tomsws6 View Post
Ok, the more I reread what I wrote I guess I should have worded it differently. My understanding is , and I could be wrong , but with first time home buyers programs it usually requires 5-8% down instead of the 25-30% down on conventional loans. Now with new construction loans Im not finding anything like that. Im just wondering if theres anything out there like that. Im not looking for free hand outs. I have no problem paying for what I have and what I want. In the end I would be paying that money anyway so it would not be given to me for free. Im looking for something that does not require that large of a down payment is all. I dont think theres anything wrong with that since I would be paying it regaurdless.

And I dont think yor being to harsh as I asked the question here on an open topic forum. In the same respect who is anyone to say that my kids will be fine and what is wrong with wanting more for them? Gods not making anymore land , unless you live in Hawaii , so this could be a small long term investment for when Im dead and gone that will go to them. I do appreciate your reply though
Ok, that makes more sense and seems more reasonable.

I would call a few mortgage brokers and see what they have to say.
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Old 02-24-2014, 09:54 AM
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Originally Posted by lionsfan5454 View Post
Ok, that makes more sense and seems more reasonable.

I would call a few mortgage brokers and see what they have to say.
Yeah , sorry about that as I was a little misleading.
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Old 02-24-2014, 09:56 AM
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One thing you could consider if the area is rural and not restricted is to purchase a used mobile home for a "song and a dance" to place on your property to live in while you build. If you have enough savings to get you to the point of owning the property and building the foundation of the new house that would probably put you in a good position for financing the construction of your new home since you will have a significant amount of equity at that point. From a security standpoint, living on the property while construction is going on is a very good idea as building material theft is a serious problem almost anywhere these days.
I built my home back in 1998-99 in a then rural area. I did not do the mobile home thing as we lived just 4 miles away but I knew friends who did so and they ended up with fine homes and they then sold the used trailer.
I never went with a regular mortgage but rather a builders loan and then converted that to a HELOC-Home Equity Line of Credit since I had a very high equity in my home by that point.

Good luck in attaining your dream!
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Old 02-24-2014, 10:04 AM
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Originally Posted by tomsws6 View Post
Sure , no problem...We'll have a party

"Im just wondering if theres anything out there like that. Im not looking for free hand outs. I have no problem paying for what I have and what I want. In the end I would be paying that money anyway so it would not be given to me for free. Im looking for something that does not require that large of a down payment is all. I dont think theres anything wrong with that since I would be paying it regaurdless."
I think builders of new construction (maybe more for developments) have a source of financing. However you may not get the best rates.
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Old 02-24-2014, 10:15 AM
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In short, the steps we followed when we build our home (owned the home we were living in at the time).

Did a construction loan through the same company our current mortgage was through.

Spec'd out our home to build, got final price. Put 5% down on our construction loan. Payments went to builder after stages of construction were complete (foundation, framing, etc. I think there were 4 or 5 stages).

After a payment was made to the builder, we were then making payments on the second mortgage based on the amount that was paid out.

When house was complete, and COA was issues, construction loan converted over into a conventional mortgage.
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Old 02-24-2014, 10:28 AM
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FLACHUSNRET and Ruz have some good advice. And I understand, you are not looking for free money, but it's hard to get a loan big enough to build a decent house when the only collateral right now is empty land.

We're doing homework ourselves right now for a similar situation. We have a decent home but want to build a log home on some land. The problem is juggling being able to build before we sell this home, knowing we'll need the proceeds of this sale to do the build.

One thing to watch out for, in some cases the construction loan will not only have a steep rate, but will also have a fairly short term (1 year for example). You could hit a hefty penalty if things are not done within that term - be sure you have your ducks in a row and are ready to move along with the build before you actually take the loan. And laws on lending and building vary from state to state so do your research.

Good luck - it CAN be done. We're having fun, but sometimes it seems we have been planning and investigating forever and we have not turned the first shovel of dirt yet.
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Old 02-24-2014, 10:33 AM
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Pics of Wife.......geesh.




Man you guys are slippin.


In all seriousness....even FHA (first time home buyer) is a program, and a subsidy of sorts for people that need help. Or at least in theory to help people get into home ownership. As stated you don't need that help. You could take that $70k and plunk it down on a very nice house, but you are just choosing not to...and that is fine......sorry, but you have fallen into the nanny state mentality a bit.

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Old 02-24-2014, 10:52 AM
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Find out if after you have purchased the land if it's value will count as part of your down payment.

I built a house in Tn in 2003, we already owned the land and the bank counted it's value as our collateral for the loan. I got a construction loan, and you are supposed to start paying interest on that loan as soon as you do your first draw. We had an addtional $50 K we wanted to use on the construction of the house. So we paid the contractor with our $50 K first, so as not to start the interest running on the construction loan. Then we started draws on the construction loan. We didn't use the full amount of the pre-approved loan by the time the house was done. When construction was completed we had the property reappraised. It appraised for more than the cost of construction and the land value combined. then we converted the construction loan into a 15 yr home loan, with the equity already being there because of the appraisal value vs the loan amount.
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Old 02-24-2014, 10:59 AM
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There is a bit more risk to the lender in a construction loan situation, sometimes because of crooked builder. Sometimes construction / construction loans go bad even if no one is at fault. When I built, I purchased the land first, paid it off, and then used it as collateral for the construction loan. Since you're buying the land from the builder, to do this you'd need a contract with the builder which would allow you to defer construction and be contingent upon you getting financing after the land is paid for. Saved for a bunch of years to do this so no issues when getting the construction loan.
I don't know of any specific lending programs designed for your particular situation - maybe all you can do is just wait and save your $$.
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Old 02-24-2014, 11:08 AM
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As an aside from the financials, make sure there is clean drinking water on that land. It would be quite a disappointment to drill a well and find ground water contamination.
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Old 02-24-2014, 11:12 AM
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Originally Posted by WydGlydJim View Post
In all seriousness....even FHA (first time home buyer) is a program, and a subsidy of sorts for people that need help. Or at least in theory to help people get into home ownership. As stated you don't need that help. You could take that $70k and plunk it down on a very nice house, but you are just choosing not to...and that is fine......sorry, but you have fallen into the nanny state mentality a bit.
Jim, I think you are reading this wrong. If I understand the OP right, the problem is that he wants to build new, not buy a house that's there now.

He has $70k. I'm just making up numbers for example but let's say he can use that as 20% down and - assuming good credit etc - can buy an existing house today worth $350k. Fine.

But let's say he wants to buy land worth $70k, and build a $280k house on it. Once it's all done, it will be worth the same as the first example - house + land = $350k. BUT - right now he has $70k to buy the land but the bank will not loan him $280k to build - he has only $70k collateral. He's looking for something as a short term loan while he builds that house, at which time a conventional mortgage will be available because there's a nice home there.

Again I'm using those numbers as illustration but hopefully that explains it. He's not looking for a handout, or a donation, or a freebie. He just needs to get the house build so there is value there to allow a regular mortgage.
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