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How's this work with down payment and loan type? For easy math say the land and house are both $200k. If we want to buy the land first say we put down 30% and sit on it for a year. Could we take out a loan that kept our payment loan while we did the planning and then refi it into a construction loan when we're ready? Would the down payment on the land count during the construction loan process?
If you aren't going to build right away, you will need a land loan and likely a minimum of 30% to 40% down, depending upon if the lot is a finished lot or raw land. A finished lot has at least one utility service and has access via public road or private road, with a road maintenance agreement. Every bank has their own definition, but this is the way the many approach land loans. Rarely over 15 years, most likely a balloon. Most will want you to start building ing a year or two.
It's lake front and they're all lots so it should qualify as a lot loan. We probably would start building within a year, would it then transition to a construction loan, is this a refi or would it just transfer over?
After you acquire your land (with a land loan), when it's time to build, you would take out a refinance construction perm loan. The C-perm loan would pay off your land loan, then advance you building funds, a portion at a time to build your dream home. There are some that will use future value as your value, while some will use actual costs (land+building+closing costs). Using future value allows you to use equity count towards down payment.
Talk to your preferred local bank. It probably wouldn't hurt to put down 20%+ of 400k right off the bat (on the land loan). The bank will be happy to have more of your money.
Probably your land loan would remain a land loan until construction is done.
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