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The Water Cooler
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Buying Land/Construction Loans?
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<blockquote data-quote="GlockPride" data-source="post: 2081713" data-attributes="member: 12153"><p>We did a construction loan about 2.5 years ago when we built. We already had the 13 acres and some equity. </p><p>We paid on invoice with lendig institution approval. Meaning we would submit for payment, the bank sends out a rep for approval and then they deposit money. Check is written and contractor is paid. We did have have to put some cash into the project as well as a down payment when financing. You have to watch that the bank per-appraisal on project and final appraisal opinion may vary, some by 5% or more. </p><p></p><p>The final project had everything to do with rolling into a permanent mortgage. You need to be prepared to bring several thousand to the closing. We had to bring several thousand to the project, several thousand down payment and several thousand in closing costs. They will also expect to roll in your acreage so if you default they can take it all. Also, if you are not 82% loan to value you will have PMI. </p><p></p><p>You ALWAYS need more dinero than you think in the beginning. Costs will increase. Do not go into this broke or 'tight'.</p></blockquote><p></p>
[QUOTE="GlockPride, post: 2081713, member: 12153"] We did a construction loan about 2.5 years ago when we built. We already had the 13 acres and some equity. We paid on invoice with lendig institution approval. Meaning we would submit for payment, the bank sends out a rep for approval and then they deposit money. Check is written and contractor is paid. We did have have to put some cash into the project as well as a down payment when financing. You have to watch that the bank per-appraisal on project and final appraisal opinion may vary, some by 5% or more. The final project had everything to do with rolling into a permanent mortgage. You need to be prepared to bring several thousand to the closing. We had to bring several thousand to the project, several thousand down payment and several thousand in closing costs. They will also expect to roll in your acreage so if you default they can take it all. Also, if you are not 82% loan to value you will have PMI. You ALWAYS need more dinero than you think in the beginning. Costs will increase. Do not go into this broke or 'tight'. [/QUOTE]
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