Can I use the equity I have paid on land and place it toward a home mortgage?

If you build a home on that lot, you can use the equity... if you purchase a different home elsewhere you cannot... you can sell the lot, pay off your loan, and use the remaining proceeds for your down payment on another home.. but you cannot pledge that equity against a home on a different lot.. if you defaulted, what do they foreclose on? Which property?? do they foreclose on both?? just too many issues which is why this type of loan cannot work and is never offered... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Using the equity in a piece of land as equity to purchase another home is not going to happen. The only way you could use the equity would be to borrow against the land and use the cash from that loan toward your down payment on the other home. Banks will not allow combining the two properties for one loan. A bank would consider the equity as part of a construction loan to build a new home on the lot. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Short answer, yes, you can use the equity you have in the land towards the construction of a new home. You will need a construction loan. Please contact a local mortgage lender (not a big bank) to discuss how to proceed. If you need a jump start on what questions to ask, please feel free to contact me.

You question isn't specifying the fact of where the new home will be (on the land with equity) or a built home on a different parcel? Building a new home on the existing land with the existing equity the answer is yes, this is what construction loans are for.. However, using equity from one parcel as security for another property cannot be done by a traditional lender. I am unsure is a private lender would consider. If you are trying to buy an existing home on a different parcel, and all you have is the equity in the land, you may want to consider selling the land and applying the profit towards the new purchase. You can sign a contract with a sales clause where you can buy the home upon selling the land.. In todays market this isn't such a bad idea for the sellers of the house as it shows you have assets that you need to free up.. But keep in mind the sellers will probably continue to take back up offers to yours.. Best of Luck.