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Posted: 7/1/2015 1:58:35 PM EDT
So as yall know, I have been looking for land lately around DFW. One question I have is how is land financed?

So I want to get land sometime this summer, but dont plan on starting building until early next year so that home construction will get finished around next summer. Two big reasons I want to do this is so the kids can finish the year in the current school district and because we have a baby due around January. When ever it is deemed best, I would then like to take the land loan and place it under the mortgage of the home so I have a single payment. I have been doing internet reading and it seems that land loans are a totally different creature than mortgages.

What is the best way to handle this and what would the process be?

Link Posted: 7/1/2015 3:22:15 PM EDT
[#1]
I don't remember who, but I just heard on the radio the other day about locking your rate for a year or something on new construction loans.
if you are buying the land, and building a house, seems like the way to go.

otherwise if you are vet, the texas land board for the initial land loan.
I only listen to 2 stations, but can't seem to find their advertising lists.
98.7 and 92.5

Link Posted: 7/1/2015 3:22:51 PM EDT
[#2]
Quoted:
So as yall know, I have been looking for land lately around DFW. One question I have is how is land financed?

So I want to get land sometime this summer, but dont plan on starting building until early next year so that home construction will get finished around next summer. Two big reasons I want to do this is so the kids can finish the year in the current school district and because we have a baby due around January. When ever it is deemed best, I would then like to take the land loan and place it under the mortgage of the home so I have a single payment. I have been doing internet reading and it seems that land loans are a totally different creature than mortgages.

What is the best way to handle this and what would the process be?

View Quote


I don't think there is any reason you couldn't get a land loan, and then have your construction loan purchase the land from the first lienholder.

Might just be easier to get private (aka hard non-bank money) financing on the land though.
Link Posted: 7/1/2015 3:54:35 PM EDT
[#3]
You'll need to use a local bank that specializes in land loans, Heritage Land Bank, Texas Star Bank, etc. or if you have a good relationship with a banker you can to talk to them. Land loans are not mortgages so the rates are higher and the banks generally want more down - like 20% or more. If you can find it, there's owner financing (what we did) as well. Since this is TX, chances are you won't be able to get mineral rights - but try, if nothing else to prevent a gas well from going in without you being able to say yes or no or getting a cut of the profits. Fannin, Cooke, Grayson, Hunt counties are cheaper than Collin, Tarrant in the north, I have no idea on south dallas. With so many people moving here, buy it soon as it goes up daily - ours has more than doubled in value from what we paid for it 3 years ago. Once you start to build, you'll have a construction loan that will pay off the land and fund the construction, which will then roll over into a mortgage.
Link Posted: 7/1/2015 11:55:18 PM EDT
[#4]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
Land loans are not mortgages so the rates are higher and the banks generally want more down - like 20% or more.
View Quote


Wow, I surely dont have $20k sitting around.

If that's the case then I may have to wait until I am ready to build a house.
Link Posted: 7/2/2015 12:30:49 AM EDT
[#5]
+ 1 on Heritage Land Bank, they were easy to deal wit...but you are not going to buy undeveloped property with 5% down
Link Posted: 7/2/2015 4:22:38 PM EDT
[#6]

We are looking around montgomery county and plan on doing a land/home loan as soon as our place now sells.  I don't think I'm going to be able to use the VA this time because we want a metal frame house.  How does the Texas Vet land thing work?
Link Posted: 7/2/2015 5:42:34 PM EDT
[#7]
Discussion ForumsJump to Quoted PostQuote History
Quoted:

We are looking around montgomery county and plan on doing a land/home loan as soon as our place now sells.  I don't think I'm going to be able to use the VA this time because we want a metal frame house.  How does the Texas Vet land thing work?
View Quote

VA won't do a loan for a metal frame house? I was thinking about doing this too. Except for the metal roof, I was going to have a conventional exterior though.
Link Posted: 7/2/2015 5:44:15 PM EDT
[#8]
http://www.glo.texas.gov/vlb/loans/land-loans/index.html
Link Posted: 7/3/2015 11:17:55 AM EDT
[#9]
Discussion ForumsJump to Quoted PostQuote History
Quoted:

VA won't do a loan for a metal frame house? I was thinking about doing this too. Except for the metal roof, I was going to have a conventional exterior though.
View Quote View All Quotes
View All Quotes
Discussion ForumsJump to Quoted PostQuote History
Quoted:
Quoted:

We are looking around montgomery county and plan on doing a land/home loan as soon as our place now sells.  I don't think I'm going to be able to use the VA this time because we want a metal frame house.  How does the Texas Vet land thing work?

VA won't do a loan for a metal frame house? I was thinking about doing this too. Except for the metal roof, I was going to have a conventional exterior though.


See va pamphlet 26-7 chapter 12.  The way I read it nowhere does it say the frame or foundation has to be constructed out of lumber.  As long as it meets local codes and is deemed safe, sound, and sanitary.  

I am calling our regional office loan department on monday to clarify.  Also you will probably not find a true "zero down" when building with the VA.  

http://www.benefits.va.gov/warms/pam26_7.asp
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