If you are considering a construction loan to build on a lot that you currently own or possibly looking into buying a piece of property with an existing tear down house there are several options for you to consider. There are still lot loans available but the most economical way to go about it is to purchase the lot and close on the construction loan all at the same time, thus eliminating the need for additional closing costs. The tricky part about doing this is all in the timing; the seller has to be agreeable to wait for you to line up the architect, plans and specs and sign a contract with the builder. Once these are all in place the appraisal can be ordered on the home as subject to completion of the plans and specs.

Best practice would be to do your research on builders and plans prior to looking for a lot, once you have decided on one that you like and trust then start looking for a lot Depending on the house you are building you will need the builder/architect to know if the house you want is buildable on that piece of property.

The loan to value is determined by the lower of the appraised value or the cost to construct plus the cost or value of the lot depending if you have owned it for 12 months or not.

There are construction loans available for as little as 5% down and one time closings.

Call or email me for further assistance with steps for getting a construction loan. 404-483-9526 or Jackie.peck@ucbi.com