What’s Shakin on The Beaches - Construction Loans for Tear Down and Rebuild New

While there is a shortage of land available on the beaches, there are plenty of old homes that could be torn down and rebuilt new.  Take a drive up and down the waterways or coast and you will see construction sites like these popping up all over the place.  We believe this trend will continue to grow and gain momentum especially for buyers who are buying vacation homes.  Buyers who can wait 9-12 months for a brand new dream home on the water have some pretty appealing options when it comes to financing.  5/3 Bank for example has a program that will finance your new construction home and lot altogether in one loan and with one closing.  These loans can be for primary residence and second home financing with loan amounts up to 2 million. 

Loan limits are flexible.  Up to 90% on primary and second homes if loan amount is under $424,000.  For jumbo loans the maximum is 80% loan to value for primary and 75% for second homes.

What happens if you own the home/land already?  The bank will let you use the equity in the lot as part of the down payment required.  You could have enough equity in the property to satisfy any or all of the down payment requirement.  If that’s the case you would just need to give the builder a deposit if they require it.

How does it work?

Step 1 You find a home in a great location 

Step 2 You work with the builder to come up with a cost to build

Step 3 The bank approves you for the cost of the land and the cost to build

Step 4 The bank closes in 60 days and the tear down construction process begins.  The bank disperses the draws to the builder during the construction phase until complete.

Step 5 The home is completed 9-12 months from now and you move into your brand new home, no additional closing needed!

The ONE TIME CLOSE with banks like 5/3 allows you to lock in today's rates and you don’t have to re-qualify when the home is done saving you time, money and the hassle of having two separate closings and worrying about what rates will be in 9 or 12 months.  Are you ready to walk into a brand new home? If you want that new home smell and feel and can wait a few months this may be for you. Call today for more information.

That’s whats shakin!