Playn

Boot, We've always been able to find a company to finance the construction process. If there are any "home shows" going on in your area lenders usually set up booths in those. You may also want to check local lumber companies some offer construction loans and work with local lenders. All companies have different requirements but most want to stick with 4-6 "draws". In our experience it has been on a "percent complete" not a blanket dictated percentage but like I said, all have different requirements. We've done this several times each time with different lenders (some are easy, some are a pain)

I found this web page that lists construction lenders in NJ. You may want to call a few of these to see what their deals are.

Just make sure your appraised value is higher than your loan amount so you don't come out of pocket

Good luck

http://homeplans.hsh.com/cloan/cloan...y.asp?state=nj

OnTheBay

Boot,

I am going through this right now. I go to settlement on the 27th of March. Here is what I did. I bought a 1-Acre waterfront lot with a small 1,000 sq. ft summer home on it. It needs to be bulldozed and a new home built. I looked for someone to do the construction to permanent loan mortgage, after a good two weeks of looking I was not too happy with any of the programs. Constructions to permanent loans are difficult and not too attractive and the interest rate was not very competitive on the permanent loan. Because of the time limit to obtain financing on my contract I had to go a different way. I got a conventional loan for the current lot and house, which required only 5% down, plus closing costs. One catch is that under FannyMae underwriting, mortgage companies like the improvements on the property to be valued at 60% of the total mortgage. Because this 1-acre is on the water this loan did not meet that criteria, it was only 30% improvements, so it had to go through manual underwriting which is a little more difficult because the underwriter manually goes through the entire loan. But it was not as hard as some I’ve been through. Prior to going this way I spoke with a local mortgage company who indicated that once I own the property they will give me a new mortgage based on “stated value”. This mortgage company indicated that it is easier to do once you own the property. The stated value is what an appraiser indicated your property will be worth which will give me the money necessary to build the new home without doing scheduled draws like a construction to permanent loan. Sorry to pontificate here but this was not an easy process. Bottom line is that I had to get the property first, then I dealt with the improvements. Best advise I can give Good Luck!

DJD

Eh Hem, MILLER!!!!
You posted the WRONG NUMBER! I am not in that business LOL.
Marcus can be reached at (203) 622-4499

boot

Thanks DJD . Glad I didn't call yet !

Onthebay, Thanks for all the details . She needs to find a way to pay for the property too .

Playn, Thanks for the link ! Every little bit helps .

I also found this helpful site if anybody wants to see Rates of lenders:

http://www.bankrate.com/brm/rate/mtg...t=4&market=127

OnTheBay

Boot, my mortgage does include the property.

waterspeed

If you need a residential mortgage anywhere in the USA..Call Marcus Zavattaro (a.k.a. Waterspeed) at 800-711-5394. Low rates, great service!!!

boomer

What if you get a basic mortgage first on the exisitng property then after closing get a equity loan. If your credit and income is good you can find a bank to work with you.