New home questions

[millax25]

I apoligize in head of time for posting here is this is the wrong area to post this to. I am brand new to this forum.



Basically, my girlfriend and I are in the market for a new home. Our MAX budget is 380,000. We havent been able to find a home in the area we want to live(schools, crime, etc.) We have found a plot of land near familly that has been put up for sale due to the death of the owner.

LOOOONNNNGGGG story short, he owes around 180,000 too 200,000 on the property. His only family is his nephew from half way across the country. (i actually feel bad for him for inheriting this mess) There is a piece of crap home on the property we could live in but we dont want to. We want to tear down and build, or donate the house to the local fire department.



Any whoo, If we were able to aquire these 3 acres and run down home for around 190,000, how much would we able to build witht the rest of the money left over? Would we be able to afford more because construction loans are wayyy cheaper? Would living in the bad home for a year increase our chance for a bigger build loan?



Help!



Thanks much.



Z

[sherylgray]

I suggest to get a new constructed home. Anyhow, you had to get it repaired and in some or slightly more amount you can get a new constructed ones.

Home loans are cheaper so that will not be a big issue for you guys.

Also you have to consider the home insurance policies of the earlier built home.

If you are ready to build a new home here are some resources which might help you

1. http://www.luxurylivingdirect.com/
2. http://www.shuttersmart.com/
3. http://www.advancewindowsanddoors.com/
4. https://www.mobilejanitorialsupply.com/

[bjl584]

It's hard to answer your question without knowing more details about your overall finances.

What's your incomes and credit scores. That will matter when trying to secure a construction loan.

[millax25]

Like I said, we are approved for a loan already, we have decent credit scores.

We had the loan set up for about ~30% of income including a PMI on top of loan, taxes, etc.

We dont have any debt what so ever, so the bank was ok with us going above 30% back end.

Are we able to get a larger loan if we sit on the property for a few years?

EX:

Purchase Price- $200,000 -40,000 down @~3.8% apr? Loan of 160,000(was approved for loan of 330,000 with 50,000 down on 380,000)

~2 years down the road are we only going to be "entitled" to the additional 170,000 with 10,000 down?

Would we be able to borrow more against the land?

Assuming we are able to build with all the proper septic, city, school, engineering stipulations ok'ed, how much would we be able to build with? (as a guesstimate)

[bjl584]

I would guess that the longer that you decide to stay put in the existing home, the more you will be able to build with down the road. How much depends on how much you earn, how much you save, and how much of the original mortgage you are able to pay off.