View Full Version : Home and Auto Bought a piece of property.....

Mr. Plow
05-21-2008, 07:45 AM
The wife and I bought our house about 4 1/2 years ago. Very nice house - 3 bedrooms, 1 1/2 bath, 1200 sq. ft. upstairs/1200 sq. ft. basement, nice yard, big trees, and a great neighborhood.

At $93,000 we could see ourselves growing into the house and making it a home. 4 1/2 years and 3 kids later (4 total), we've outgrown it. So this week we bought a piece of property to build our house on.

I've never bought just land so I'm not sure exactly how it works. We only had to put a down payment on it, but have to come up with the rest in 30 days. I've thought about just paying cash for it, but then the thought of mortgage popped into my head.

Anyone have any experience in any of this? Benefits of doing a mortgage vs. paying outright? Once the house is built, will the two mortgages become 1? Anything to watch out for?


05-21-2008, 07:53 AM
I'm sure others with more experience will chime in, but a good way to do it is to pay cash for the land.

Get a construction loan (short term) to build the house. Owning the land outright helps with this.

Roll both the land and the construction loan into a conventional mortgage. The cash you paid for the land serves as an effective down payment.

Someone might allow you to finance both the land and the mortgage with little down, but you won't get the best interest rates. Not sure if you could get a construction loan using a mortgaged piece of land.

05-21-2008, 07:58 AM
I'd contact Bill Lundberg via PM.

But you'll probably be on a construction loan during the entire building process. When you get your certificate of habitation, you'll roll your construction note into a traditional mortgage. At that time they'll assess the value of your property - which includes the land it's on. So you can elect to finance that portion and take some cash out of the mortgage or you can just have some instant equity in your home since you paid cash for the lot.

Hog's Gone Fishin
05-21-2008, 08:05 AM
I've known some people to build their house in stages and pay it off as they go. That saves a ton of interest.

05-21-2008, 08:19 AM
Make triple sure you are not in a flood plain. FEMA is the process of redrawing all of their maps. I know for a FACT that people have been buying land in McPherson county under the impression they can build on land bought when they can not due to new flood plain coverage. They are stuck with worthless land and most times the seller knows it. I would assume that Reno county is the same. Just something to think about.

Contact your Planning and Zoning Director in Reno county and ask about the NEW maps before you move further.

05-21-2008, 08:20 AM
Quality advice. Well done, Rooster.

05-21-2008, 04:12 PM
If I were going to start from scratch and build I would look into radiant heating. o:-)

Skip Towne
05-21-2008, 04:19 PM
So you f*cked yourself out of your house?

05-21-2008, 04:47 PM
So you f*cked yourself out of your house?

More Chiefs fans ..... :)

05-21-2008, 05:22 PM
The bullie scared you out of the neighborhood?

05-21-2008, 07:18 PM
Don't build. Get something you can inflate instead.

05-21-2008, 07:22 PM
So you f*cked yourself out of your house?

No he's sick of the neighbor staring at him when he sits around in his lawn chair and inflatable pool in the garage.

Mr. Plow
05-22-2008, 06:37 AM
So you f*cked yourself out of your house?

I hadn't thought of it that way, but yes.......yes we did.

Mr. Plow
05-22-2008, 06:39 AM
The bullie scared you out of the neighborhood?

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05-22-2008, 07:33 AM
don't know if this will help, but this is how i did it.

sold our house that sat on 10 acres.(for about 3x what we paid for it 19years earlier).

paid cash for 30 acres of timber that had an existing metal machine shed.
built a 1bedroom 1bathroom apartment in 1/2 of the shed. also paid cash as it was done.

borrowed the money to build a new house and lived in the shed for 9months while the construction was going on.

worked fine w/us and the bank. it was a little crowded in that shed w/me, the wife and a 20year old daughter. the daughter planned on living in the shed after we moved into the house, but since then i've taken over the job of watching over a 80year old great uncle when my grandmother passed away. he now lives in the shed/apartment. close enough for me to keep an eye on him and he still has some independence.

good luck,