how little can you put down on a land purchase?

I want to purchase land with zero down to build a house.


We own a home but want to move to a different school district. I want to buy land with zero down and start construction prior to selling my home and applying the equity to the new house.

3 Answers

  • Skip
    Lv 6
    1 decade ago
    Favorite Answer

    This can be done, however there are lots of hurdles to overcome and questions to answer. #1 Why would a person do this type of transaction? What is in it for the seller of the land if you default.

    Well let's go with how it could work. You will have to find a seller of land that will be willing to accept your offer of not putting anything down as well as he would also have to be willing to subordiante to a new first mortgage or construction loan.

    Now you will have to to find a lender or construction lender that is willing to accept your land that is not paid off or you have no vested interest in to lend you the money to build your home, even if the seller of the land were to subordinate to his 1st.

    Most lenders want you to have some vested interested interest in the land before they will lend on a construction loan.

    If you default what do they have to foreclose on, an incomplete house where you don't even own the land. To protect himself the owner of the land now has to pay off or take over payment of any construction loan that you were able to secure.

    Normally someone selling land want all cash, thus you have to get a loan. Most lenders will not lend more than 50-60% of the value of the land. You might get a better deal if the seller is willing to carry a note on the land, but don't expect a lot from the seller.

    I hope this has been of some use to you, good luck.

    "FIGHT ON"

  • Anonymous
    1 decade ago

    Chances are not good unless you want to pledge the finished house as collateral and then I think you might pull it off . You are going to have to get some form of security to the loender otherwise why should he take a chance ????

  • Anonymous
    1 decade ago

    There may be something of use here.

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