Contractor · Winder, GA · Member since 2016 · 84 posts · 3 votes
I'm backing into this deal I have a lake lot free and clear valued at $90,000 ( County value). I want to get the maximum use out of my $90,000 so if I'm using that for 20% I should be able to borrow $360,000 and that's why I'm backing into it to figure my size of my house cost to build and value of the house and I'm trying to do this ASAP. Any advice is greatly appreciated!! Lake Hartwell Georgia
@Jim Bryson - Some punctuation could have helped the clarity of your post a lot. Do you mean that you are going to build the house on that lot, or sell that lot in order to buy something new? It sounds like you mean you want to build on that lot, in which case I don't think you'll be able to use the value of the lot as 20% down. I might be wrong, as I've never dealt with raw land before, but it doesn't make sense to me that you'd be allowed to count that as a downpayment - mostly because that would be like counting the equity in a deal as a downpayment, and banks don't let you do that. You need to put down a percentage of the sale price, not the percentage of the market value.
You might be able to refinance the lot at 80% LTV, then use the proceeds as your 20% down. That would give you about $70-75k depending on closing costs for the ref, which you could then use for a downpayment for a construction loan. That's the way I see it, but it's possible that new construction is different. Looking forward to hearing what others have to say.