I'm purchasing some land and want to know if I can use that land as collateral to start building my home ?
2007-10-21 05:29:31 · 11 answers · asked by Nicole B 1 in Business & Finance ➔ Renting & Real Estate
Depends on how long you have owned the land?
After 12 months, the equity in the land is calculated as your down payment on the new loan. If the equity is greater than the minimum down payment required it is possible to get the new loan with no cash out of pocket. (closing costs excluded)
2007-10-21 05:37:23 · answer #1 · answered by Anonymous · 1⤊ 0⤋
As a rule yes.
But you may not be able to because of zoning laws, or it may not be advisable.
But there may be other catches, buy a home instead, from a builder, get it customised or custom build it.
Things like utilities, water, sewer and telephone or even cell phone may be a problem, so you need to be care full, I know of people sitting on a beautiful parcel of land and paying taxes and are not able to do nothing with it.
Check out every thing. This must be your first home then get good advise from a local lawyer and a banker, make sure both banker and the lawyer (he/she) has no connection or interest in the property that you are purchasing. Plan ahead do the investigating before purchasing.
2007-10-21 05:45:58 · answer #2 · answered by minootoo 7 · 0⤊ 0⤋
In many countries, yes, if you have a building permit
and the land value is deemed high enough compared
to the whole construction expenses.
Other criteria will intervene also, your income level
and stability is a key one, as lenders are becoming
more demanding about personal repayment abilities.
.
2007-10-21 05:52:52 · answer #3 · answered by pgreen 6 · 0⤊ 0⤋
To make sure your land is acceptable as collateral, show your prospective creditor a photocopy of said land documents for pre-evaluation.
2007-10-21 05:33:53 · answer #4 · answered by Rhythm of the Falling Rain 7 · 0⤊ 0⤋
Only if the land has a value about double your building costs. Usually you need to put real property up as collateral.
2007-10-21 10:11:30 · answer #5 · answered by Landlord 7 · 2⤊ 1⤋
Yes, it is possible if you have a clear title. Given the current market, you may find it difficult to obtain such a loan. Good luck.
2007-10-21 05:33:10 · answer #6 · answered by david42 5 · 0⤊ 0⤋
You can use land as long as you have a free deed to it
If you do not, you may want to check with your bank
2007-10-21 05:34:33 · answer #7 · answered by audioworld 7 · 0⤊ 0⤋
Sure. Ask a lender about a construction loan.
2007-10-24 20:59:04 · answer #8 · answered by Genki 3 · 0⤊ 0⤋
yea
2007-10-21 05:31:54 · answer #9 · answered by x0shortie13x0 2 · 0⤊ 0⤋
yes you can
2007-10-21 05:33:56 · answer #10 · answered by Val B 1 · 0⤊ 0⤋