Construction loan ?

Question

Is a construction loan a good

Move to build a home? I want to put as little down as possible ..

I have a plot of land upstate

Peter Tverdov · Answer

General rule of thumb is 50% of purchase price and the bank will lend 100% of the construction costs, I/O, Prime + 1-2% for 12-18 months as long as the ARV is 75% or less.

Ankush Bajaj · Answer

@Michelle Backer did you ever make progress on this. Any guidance from you on this would be greatly appreciated. I am in same boat, and look to get some tips and info. Thanks in advance.

David Briley · Answer

Is 50% of purchase price on just the price of the land?

Dan Slaughter · Answer

I'm contemplating this as well.  Does anyone know what is an expected down payment on a construction loan?  Can the land be rolled into the construction loan or does that need to be a separate loan until the 30 year mortgage?

Frank Hinck · Answer

@Michelle Backer

Is the plan to leave Brooklyn, or to rent it out?  If renting it you’ll need a good property manager and someone to take care of lawn & snow.

Michelle Backer · Answer

@Frank Hinck

I can buy the land with cash

I think I found a GC who is good and who I could trust

Frank Hinck · Answer

@Michelle Backer

It can be but you’ll still have to put down quite a down payment on both the property and the construction loan, and you’ll definitely want a reputable GC to coordinate all the necessary trades.   From the GC make sure to get firm payment terms, lien waivers, and warranty.   Once it’s built you’ll get it appraised and refinance the 2 loans into 1 traditional 30 year.

Construction loan ?

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