Agents Online Real Estate Forums, Discussion, Realtors Marketing Tips

Follow AgentsOnline on Twitter

Click Here to display our logo on your site and link to us!
AgentsOnline Real Estate Discussion Forums Logo

Realtor CommunityA popular online real estate community since 1998!


Advertisements


Sponsored Links
Advertisements
How To Advertise Here
How To Advertise Here

Good Idea!
Realtors Directory

Facebook
Sponsored Links
Top Posters (30 Days)
Barbara Herbert 31
Dripping Springs 30
Lucky Leonardo 29
Mr. Clean 25
Vermont 23
WolfHouse 20
Trouble 19
RonnieEmz 16
Marksmith 14
Z06Fanatic 10
David Hunter 8
Aliya 8
RandomREODudeOK 7
Daniel1234 7
sualk54 6
Matched Content
Topic Options
Rate This Topic
#452220 - 04/30/16 08:32 PM Equity vs. Down Payment?
pcooper114 Offline
Junior Member

Registered: 04/30/16
Posts: 3
Loc: GA, USA
First time poster here!

My wife and I have purchased a piece of land to build on, and once we sell our current home, we plan to begin building.

The profit from the sale will be enough to pay off almost the entire loan for the land, and I had questions about how to go about this.

The chief loan officer at our lender (who is a family friend) has advised that paying down the land loan to nearly paid off is the easiest way to handle it instead of saving up for a down payment. He said to leave $100 or so on the land loan so that they can roll it into the construction loan (thus not having to re-apply for the new loan, pay new loan fees, etc) and that the equity in the original loan will be like having a down payment. So say the land is $40k, the construction plans appraise for $300k, and together they roll into a total $340k construction loan, $40k-ish of which is paid off.

Does that make sense to everyone? This is our first build, so I'm making sure we wouldn't benefit more from having more cash up front instead of paying down the land loan.

Thanks for any thoughts!
-Patrick


Edited by pcooper114 (04/30/16 08:33 PM)

Top
Advertisements
#452223 - 05/01/16 04:50 AM Re: Equity vs. Down Payment? [Re: pcooper114]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7588
Loc: Vermont's North-East Kingdom
Your Loan Officer Friend is providing you with "straight scoop" on this score.

In the end, all debt is going to be rolled into one big new Mortgage on the New Property anyway (and your Loan Officer already approved you for that loan amount, I assume).

Let's just hope you can prepare the current Home For Sale and get it sold to dovetail with the completion of construction on the new one . . . . like clockwork. You don't want to forget that it needs to be a "New Home" for your Buyer, so don't abandon it !

Unfortunately, many home-building Sellers forget this and begin treating the current home with benign neglect, like an unwanted step-child, while they focus their attention on the construction project . . . . all while achieving "top dollar" for the current home is the key to success for this whole process. It must not be forgotten about; especially when your scenario appears to require conforming to a "tight" budget.

Good Luck !
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

Top
#452226 - 05/01/16 10:37 AM Re: Equity vs. Down Payment? [Re: Vermont]
pcooper114 Offline
Junior Member

Registered: 04/30/16
Posts: 3
Loc: GA, USA
Thanks for the insight! We have worked pretty hard to get the current home ready for show and have received decent interest so far, though it has only been about a month or so.

The build is a big part of our short-term plans, but we're not letting it get to our heads or anything ;) We're not in any hurry, but I'm not willing to begin building until this one is sold, so we're just sitting tight for now.

Just in case, if any middle Georgia people are here, come take a look!

http://www.zillow.com/homedetails/101-Flowing-Meadows-Dr-Kathleen-GA-31047/103527064_zpid/?view=public

Top






Google Custom Forum Search

This Google Custom search may do a better job of searching the forums for some keywords than the old forum search does. The results do not include threads from the Asset Managers Forum however. To search that forum you will need to be actually in the Asset Managers Forum and you will need to use the old forum search below.
Search

Newest Members
thaingoctuan, AlSasNoCatchEwan, Bali Ray White, nigel1434, MikaE
29459 Registered Users
Who's Online
3 registered (OrlandoAgent, Mr. Clean, Muniart), 77 Guests and 5 Spiders online.
Key: Admin, Global Mod, Mod
Shout Box

(Views)Popular Topics
I MAKE 100 COLD CALLS EVERY DAY & LOVE IT! 28085787
No new orders today 13084609
Stupid MLS comments. 3264598
What do you know about Froy Candelario, top agent in USA 1178785
Stupid QC comments and BPO requirements. 1050530
New HUD Listing Brokers---Any Update? 1020496
Is there religious content in Buffini class? 815740
Let's talk about our cars 662606
Name that Flick. Great movie Lines. 598135
Pay it Forward - BPO/REO Tips & Tricks I & II 582697
Most common items found at an REO 560528
EML 459230
REOTRANS 434292
Main Street 412125
asset val seminar in colorado 403700
assist 2 sell or 1 percent realty? 337432
HOMONYMS - There, Their, and They're 302918
Evalonline 300066
Land America 285049
Mainstreet 261858
Agent Directory

real estate agents

Featured Member
Registered: 04/04/07
Posts: 456

How To Advertise Here


This site presented by RNC Internet Services