Quote:
Originally Posted by LemansE90335xi
The plus side is that you have the land. Something to consider though happened to me years ago. I bought a large lot, about 4.5 acres, and sat on it for a few years before building. The problem I ran into was nobody wanted to give me a mortgage because I owned the land outright. They didn't want to be holding a mortgage without claim to the land the house was sitting on. You might want to check into that with your lender of choice just so you know where you stand.
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Interesting. I wonder if that's a Canadian thing? The lender we are working with for the construction loan actually prefers that we paid cash for the land as that will take the place of 20% cash down for the construction loan. They put a lien on the property during construction, I guess, to cover themselves in case we default before the house is built. Once construction is complete the loan automatically converts to a 30 year fixed mortgage. We lock in the mortgage rate at the time the construction starts which is awesome as it takes away the worry about interest rates spiking during the 6 to 8 months of construction.