Build a house and buy land too | Just Ask Jan

By JAN ZUFELT
Kingston Community News Columnist
June 29, 2012 · Updated 2:22 PM 

Dear Jan: We want to have a home built so we are looking at buying a piece of land. Our problem, though, is that if we buy the land and pay it off in full, then we don’t have money to build with. Is there a way around this problem?   —MML

Dear MML: Typically, most people when building their new home get an All-In-One Construction Loan. Once you have met with a builder and the lender, you will be advised to write a contract for your land. Your local real estate broker can help you with that.

The lender and/or builder will advise you on how many days for your feasibility study and how many days/months until you should close on the land. When the time comes to close on the land, this will be the first draw out of your construction loan. The land gets paid off in full at that time.

The lender will advise as to how much of your cash you will need to put down, what your interest rate will be, etc. The lender will order an appraisal to make sure you are not overpaying for the construction of your new home.

There are lots of steps, but a good builder and lender can make the process easy. We are fortunate to have both in our area. Let us know if you need a recommendation.

— Jan Zufelt is an agent with John L. Scott Real Estate in Kingston.

 

Comment on this story.

COMMENTING RULES: We encourage an open exchange of ideas in our online community, but we ask you to follow our guidelines for respecting community standards. In a nutshell, don't say anything you wouldn't want your mother to read. Please see our FAQ if you have questions or concerns about using Facebook to comment.

So keep your comments:

  • Civil
  • Smart
  • On-topic
  • Free of profanity

We ask that all participants own their words by logging in with their Facebook account. It's a simple process that will take seconds and helps keep our comments free of trolls, cranks, and “drive-by” commenters. We reserve the right to remove comments from anyone using screen names, pseudonyms or false identities. Please refer to our Terms of Use for full detail on participating on our site.