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Buying land to include building new home??
Hello all!
So I've taken a long break from this site as we put our plans on hold. Well now something has piqued our interest... again.
There's a piece of property we want to buy. It had a home on it. The home was torn down due to mold. DH's cousin started building the new home. New foundation etc. Not much else as the county had informed DH's cousin he needs the home 6ft from the ground due to flood zone. He doesn't want to re-do and also his wife and daughter never wanted to move anyways..
What I want to know is all the ins and outs of how to go about purchasing this from him?? Is it easy? (We hope to use VA, I know they are super picky but not sure about new construction loans). Where do I find contractors to build the home for us? We don't want anything extravagant. We just want a simple home with lots of room. I just had our second baby so I don't have time really to sit on the phone calling for information just yet. But hopefully I can gather useful info from you all here. Thank you in advance!
Re: Buying land to include building new home??
I don't know about VA, but a lot of banks in general are not doing new construction loans unless you have significant cash reserves - it's very hard to get approved for because of the risks. The exception to this is buying in a new development where you don't get the mortgage until the home is built; we were told that was really the only way to get new construction.
Another issue is that because the transaction would be between family, it would be non-arms length. I think there are extra requirements that go along with that.
There are websites you can google for that will give you home plans and can connect you with a builder. I think I googled "build custom home" or something like that.
Your best bet is to call a mortgage broker and lay it out for them to see if it's even an option.
We are doing a new build. We were gifted the land so it's a bit of a different story there.
FIL is building our house so we had to have 30% down instead of 20% (because of the arm's length transaction). We were able to use the land as a down payment since we owned it.
We also had to be very careful with how we priced the house and what we asked to borrow. If our estimate was more than 5% different from the bank's we had to have anything above that in savings (we were lucky and came in within their price range. I'm not sure how helpful any of that is...
Craft Blog
Yep. This. All the reasons mentioned. And, you said that the previous home was torn down due to mold??? Mold growth is a result of moisture....flood zone...seems like an issue.