I have my eye on a home that is half finished being built. Exterior walls, windows, foundation, elec., heat and roof are installed. Only things needed are interior walls, appliances, fixtures, flooring, landscaping, and pool surfacing. What type of loan would be best suited to purchase and then finish this home? Purchase? Construction? Thanks.
2006-12-12 06:25:16 · 9 answers · asked by thype45 3 in Business & Finance ➔ Renting & Real Estate
I would tell the current owner / contractor how I want it finished and how much I would pay for it finished. This would require a purchase-type home loan. This is usually how this works.
If you buy it will no stipulations for the seller to finish it, you would need a purchase loan and then a construction loan to finish it.
Addition: Not only does having the seller finish it make your loan easier, if things go over budget, it won't cost you a cent more, as the seller has already agreed to sell at your set price with your set demands. It's their loss, not yours.
2006-12-12 06:29:11 · answer #1 · answered by Phoenix, Wise Guru 7 · 0⤊ 0⤋
You would need some type of construction loan. There may be options to do a "one-time" close where your normal financing is already pre-set, you have a temporary construction phase to finish the home, modify a few papers, and get your normal loan.
Be very, very careful in purchasing this home. Anyone who supplied any parts or labor to the home so far has a "mechanic's lien" on the property. If whoever started the construction doesn't pay them in full when you purchase the property, YOU would have to pay them. For this reason, it's difficult to find a title insurance company to insure your title against these potential liens, unless you go to the same title company that insured the first guy.
Many people have gotten screwed after buying something like this, because usually the reason it's for sale half-way through the process is that the first guy ran out of money. Which means someone out there is owed money, and you don't want it to be you.
2006-12-12 06:32:50 · answer #2 · answered by Anonymous · 0⤊ 1⤋
Try to get the seller to finish the home if at all possible. Make your offer for a finished home so that you only need a purchase loan. A contruction loan is alot of work and you have to refinance it once the construction is complete!
2006-12-12 06:31:54 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Depending on the price range, maybe try to do an FHA 203(k) loan. Don't worry about the title. When you get a mortgage on a house, the lender will not lend unless there is clear title, and a title policy stating such. The title company searches for any mechanics liens and pays them out of the proceeds of the sale as well as any mortgage liens and taxes.
2006-12-12 06:42:37 · answer #4 · answered by teran_realtor 7 · 0⤊ 0⤋
Hey i'm here for the first time. I came across this question and I find the answers really helpful. I am hoping to offer something back and help others too.
2016-08-23 12:43:31 · answer #5 · answered by Anonymous · 0⤊ 0⤋
you dont even want to deal with the construction end of it....purchase finished only
2006-12-12 06:36:50 · answer #6 · answered by cookiesmom 7 · 0⤊ 0⤋
Interesting! Never really gave this much thought
2016-07-28 05:53:12 · answer #7 · answered by Anonymous · 0⤊ 0⤋
EASY THE ONE WITH THE LOWEST INTEREST RATE!
2006-12-12 06:43:54 · answer #8 · answered by bodacious baby 7 · 0⤊ 0⤋
Yes, it might be
2016-09-22 06:17:42 · answer #9 · answered by celeste 2 · 0⤊ 0⤋