Questions on Building a House

I am a Realtor in NY, so this may vary a little as you are in TX, but...

The way the market is, I would also recommend you get your house on the market. Now is a good time. By the time you get your land secured (About a months time) and you get an acceptable offer on your home, plus time for them to build, you are looking at 3-5 months from now before you could really move into that new home anyway.

A new home construction loan is done in draws, so you dont actually pay anything on the loan until your house is complete, has passed all inspections and you close on the loan. As far as the land goes, you CAN have it rolled into the new construction loan OR you can buy the land you want before they actually start building. Just keep in mind most people buy land with CASH. (Least they do in NY state)

I hope that helps. Some contractors are willing to buy the land for you (with a signed contract) and will also build the house then "sell it to you" as you would buy any other home on the market. You would again not need to make payments on the new loan until you close on the new house, but if you have not yet sold your existing home you will be making double payments until it sells.

You may also consider a rent to own or seller financing with a certain percentage down IF you are not having luck selling the house.

Good luck:)
J.
www.mygc.com/jfiegl

i suggest going to a book store, talking with a loan officer that is good with new construction & meet with several builders. Finding a reputable builder is huge. Once your loan is set up the mortgage company sends the money to a title company & the builder takes draws on the money from the title co. I used to work at a title company & there are a lot of dishonest builders out there so please be careful, also a lot of builders are going belly up. Perhaps you can. Most people pay cash for a lot, otherwise you roll it into the new construction loan. Normally you start paying on the draws so every draw means higher payments. In this economy I would sell your house first & rent. Most people go over their budget by 20% so allow for extra room. Best of luck

You do have some options, but you're probably going to be making 2 mortgage payments until your old place sells no matter what.

If you've paid off a good portion of your first mortgage, you might be eligible to take out a home equity loan. You can take money from that to pay for the construction, but you'll probably still need a mortgage to make up the difference. With a home equity loan you can pay interest only for up to 7 years, so if you're pretty sure you can sell your home in that amount of time, it will save you some money each month.

I would recommend that you go ahead and put your house up for sale ASAP. If you have an offer before your new home is finished, you can always work something out with the buyer. Or if your new home is partially completed you could go ahead and move in while you finish building! It's more work but definitely a money saver.

This is kind of off topic, but if you choose to build, just make sure you look into every detail. My sister built and it turned out to be soooo much more than they originally projected (20% more). They were not carefully tuned into details and wound up adding a lot of things that they did not include in the orginal price estimate from the builder - things like extra outlets, automatic garage door opener, landscaping, fences, sprinkler system, dimmer switches, etc. Small things really add up, and when you are looking at an existing house, you don't realize how many "extras" may already be in there. Best of luck in your planning and decision making!

Hi- Just finished building a cottage (850 square feet) for my Mom and moved into the larger home on the same property. Not sure what the eal estate Mom means, but 3-5 months for the whole process is way too short. It'll take years from the start of getting permits to moving in a larger family size home. I do have lots of thoughts on this having just been through the whole process in CA. Contact me privately if you'd like my take on it. Good luck! Kari