Land purchase for future home

2 Replies

I am looking at purchasing some raw land to build my home on. I'm looking at buying with cash from a personal lender then making a few improvements (running electric, water, building, pads, etc.) then approaching the bank for a construction loan and mortgage on the land and home. I am just trying to avoid having to pay a ridiculous amount down on the land. Any advice on if this is a good idea or not?

Blake,

Sounds like a good plan.  I did this a few years ago.  Bought a few acres with cash.  Cleared a home-site, put in a driveway and some other site work with cash.  Then got a construction loan when I settled on a house plan and was ready to go.  They used the land as the collateral, I didn't need "another" down payment.  I ran my electric and drilled my well after getting the construction loan.

The bank was willing to loan more than just the construction (to cover a portion of the land), but I decided against this.  Would be fine to do if you wanted to pull your cash back out.

Good Luck!

Chris