Construction loans?

HBCinOI

My husband and I just purchased a property and plan to build in about 2 years.  I had some questions about construction loans.  I was talking to a loan officer and he mentioned that they lend 80% but not to worry because the homes always appraise for higher so you really are not coming to closing with a downpayment of 20%.  Just wondering how realistic that is?  We are building in a gated community where a majority of the homes are huge, over 5000 sq. ft. (a few are 10,000 square feet) even though our house will only be 3000 sq. ft which is the minimum in the neighborhood.  It's only me and my husband so we don't need anything bigger than that.  I didn't want to have to put down that much if I could avoid it because we do want to put in a pool and I want to have money to furnish it, etc. 

WishesSheCouldCook

We went through Suntrust.  It sounds like our loan is different from what your lender is planning on doing though.  We did construction to permanent and closed in October and we are currently building.  We had to have 30% down because FIL is building it.  We were able to use the land as our down payment since it was gifted to us by our ILs.  Otherwise we would have had to have the cash.

Sisugal

Do you own your lot outright or are you financing it?  Check to see if the value of the lot (if you own it outright) can be considered part of the total house value of the house - (I believe it is) when looking at the 80/20 calculation.

TripleShot

We are planning in building next year and using our paid off land as the 20% down. Do any of you know if the bank requires you to have an additional amount in available cash? I thought I read about that but can't confirm.  

HBCinOI

We did take out a lot loan and put about 25% down but our lot is only a fraction of the price that it will cost to build our house.  All the homes that are already built in this neighborhood were built at the peak of the market and these people paid over $200,000 for a one acre lot.  We paid nothing close to that!  I feel we got a really good deal as the lot was in foreclosure and the home values in the neighborhood are still pretty high.  Just didn't know if I should expect to go to closing with a check for 20%.  We are still about 1.5 years away from doing anything with the lot so I have not really spoken to many mortgage bankers about the construction to perm financing.