1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.
  2. From courtside seating to loudville Amazing Tickets offers a fantastic selection of Cavs tickets at the cheapest prices found anywhere.
  3. Please select the "Splash-Mobile" style if ads are breaking your tablet/phone's browser.

Need Help....Can I buy land with little or no money down?

Discussion in 'Off Topic' started by TheISHT, Jun 28, 2010.

  1. TheISHT

    TheISHT Gold Star Member

    Joined:
    Jun 26, 2006
    Messages:
    3,704
    Likes Received:
    1,275
    My wife and I have really good credit. I want to buy some land but I'm not sure how to go about it. Do I have to put 20% down? Are there places that will let you put no money down?

    Do you people have any friends that are loan officers?

    Any info is appreciated.
     
  2. TheISHT

    TheISHT Gold Star Member

    Joined:
    Jun 26, 2006
    Messages:
    3,704
    Likes Received:
    1,275
    No one on here buys land?
     
  3. Mac

    Mac Slow Motion See Me Let Go

    Joined:
    Apr 17, 2005
    Messages:
    10,536
    Likes Received:
    1,851
    Most banks don't do land loans, so your biggest obstacle is finding somebody to finance land.

    Down payment will probably factor on your debt to income as well as credit score. If you are in great shape in both of those departments, they may be willing to work with you. However, since the real estate market is in a dump, you would also have to find somebody to give you a deal under fair market value since the lender is probably not willing to take the risk. When my bank did lend on land, the would only go 75% LTV. So not putting money down is going to be a long shot.
     
  4. QuadrupleDouble

    QuadrupleDouble All-Star

    Joined:
    Aug 24, 2008
    Messages:
    7,291
    Likes Received:
    8,781
    Do you plan on building right away? That could help with financing because you get a construction loan which you pay on until the project is complete and then you transfer that to a normal mortgage.

    Banks will lend for land purchases, but your specific conditions will determine your terms.
     
    1 person likes this.
  5. TheISHT

    TheISHT Gold Star Member

    Joined:
    Jun 26, 2006
    Messages:
    3,704
    Likes Received:
    1,275
    I wanna buy property now and build later.

    1. Right now I'm still trying to find a job, Wife has had the same job for 7 years making 65-75k.
    2. I've never paid interest on Credit card debt in my life. So no credit card debt.
    Only Debt I have:
    House (small condo)
    1 Car (almost paid off)
    1 student load for 17K that hasn't started yet
    Normal monthly bills, gas, electric, phone, and cable.
     
  6. Notorious

    Notorious Gold Star Member

    Joined:
    Nov 30, 2008
    Messages:
    690
    Likes Received:
    557
  7. bob2the2nd

    bob2the2nd member 32

    Joined:
    Apr 18, 2005
    Messages:
    10,439
    Likes Received:
    5,189
    my guess is no, but im not positive.

    I just made an offer on a house and have applied to 3 places to see who can give me the best rate for a mortgage. I am 26, salary in the mid 50s, have a credit score at 770, have 1 car paid off, one car loan for 20k, and about 12 K in student loans. The absolute biggest factor I keep running into is down payment and I am looking to put down 10% (closing costs and 5% covered by parents)

    Everyone I talk to says I have great credit, they arent worried about the loans, but my options are very limited. I have been told my options for a mortgage are either a government backed one (those require having a house on the property) or my credit union which has a special program running for first time home buyers (has to be a livable house) and both options require putting down at least 5%.
     
  8. Splitz

    Splitz RIM PROTECTOR Staff Member

    Joined:
    Apr 1, 2007
    Messages:
    9,050
    Likes Received:
    12,141
    From what I heard, if you buy land and then build a house on it, the land (which you have to pay cash for) counts as your down payment. Someone correct me if I'm wrong.
     
  9. QuadrupleDouble

    QuadrupleDouble All-Star

    Joined:
    Aug 24, 2008
    Messages:
    7,291
    Likes Received:
    8,781
    The days of 0 down are done and gone. I used to get first time home buyers in a house and have them leave with a check at closing instead of having to invest one penny.

    You're looking at a minimum of 5% conventional, or 3% FHA. Go with the conventional whenever possible because your costs are typically higher by going FHA and you can even find programs with no mortgage insurance at 5%. Although this is not as big a deal as it used to be as those fees are now tax deductable just like your interest.

    When I was 21 I bought my first house with really nothing down. You said you have one car paid off, try using that to obtain a loan toward the 5% you need down.

    I leveraged a Honda Accord I had at the time to get a loan that would cover my 5% needed for the down payment.
     
    1 person likes this.
  10. QuadrupleDouble

    QuadrupleDouble All-Star

    Joined:
    Aug 24, 2008
    Messages:
    7,291
    Likes Received:
    8,781
    You don't have to pay cash for the land. If you have said equity in the land, the bank may use that as collateral to secure the loan.

    I've done a lot more with builders who owned the land that my purchasers were buying, but when the owner owned the land it went a little different.

    When I've dealt with this in the past, my client would have to obtain a loan on the land and then submit for a construction loan to build. The construction loan is usually doled out in phases of the construction process and you're paying on it the whole time you build.

    After that, you get a bank to give you a mortgage, which covers the entire process by combining the construction loan and land loan into one normal home mortgage.

    A big problem that is occuring now is that people will get the construction loan, but then can't get the bank to mortgage the property. You see that a lot with odd houses that the bank can't prove value for underwriting.
     
  11. bob2the2nd

    bob2the2nd member 32

    Joined:
    Apr 18, 2005
    Messages:
    10,439
    Likes Received:
    5,189
    Oh Im fine, I was just trying to explain to the poster he probably wont be able to get the land without money down.

    Im looking at a 5/1 ARM, and basically I know I wont be in the house for anymore than 2 years max (probably just 1-its a foreclosure that needs work that I would fix up and look to resell if the money was right) so Im not too worried about long term costs just what the APR is going to be. that said the 2 mortgage places Im not affiliated with said it would just be a lot easier to go FHA, though i did qualify for a conventional but at a much higher interest rate. my credit union is going to give me an 80% loan, with a 10% home equity loan. the 80% ARM 5/1 is going to be around 3.4%, and the other 10% is tied to the wall street journal rate +.75 re-adjusted quarterly. Im not ecstatic about that second part but whatever.
     
  12. The Voice

    The Voice Best in the World

    Joined:
    Mar 20, 2007
    Messages:
    12,463
    Likes Received:
    4,234
    Private message Lee, he's in the industry.
     
    3 people like this.
  13. Notorious

    Notorious Gold Star Member

    Joined:
    Nov 30, 2008
    Messages:
    690
    Likes Received:
    557
    Owner financing is the best way here. Lot's of land is up for sale with owner financing.
     
  14. Chardon

    Chardon Hall of Farmer

    Joined:
    Feb 6, 2008
    Messages:
    13,897
    Likes Received:
    11,209
    Not really relevant to this thread, but, we bought Alaska for 2.3 cents per acre
     
  15. RonG

    RonG All for one

    Joined:
    Jul 16, 2008
    Messages:
    4,625
    Likes Received:
    6,114
    Exactly what I was going to say.
     

Share This Page