We have until March 23rd to close on the lot. This is mostly because we are going to be in Australia right in the middle of this thing, but for now, what must happen is:
A) we have to get some kind of written confirmation from Salt Lake City, that this lot is indeed a buildable lot. It currently doesn't conform to zoning requirements for building in the zone, but if at any time during it's existence it did comply, then it is grandfathered in. The seller says she had a building permit before, so it is likely buildable, but we want to confirm.
B) We have to arrange for and get financing for the lot.
C) We have to do some due diligence with an architect and a builder to make sure that what we want to do is feasible within our budget.
Once we determine that the lot is buildable, have financing, and think we can do what we want to do, we will close on the lot.
After we have closed we need to let the lot loan age for 90 days so that we can "refinance" it into a new loan that will cash out the previous lot loan, provide a construction loan and the permanent loan at the end of construction. This works out well because we will need those 90 days to get designs we like, get them bid, make adjustments and get a building permit.
We will have to put 30% down on the lot, and with the refinance into a one-time construction loan, we will need to have 10% of the whole cost in equity, which the 30% would count towards and take care of. We will end up with 20% down, but if we were to try to do the one-time loan from the start, we would have to have 25% of the total, which is just slightly beyond our grasp, so this all works out fine.
Financing has gotten a bit more difficult in the last few months, but rates are definitely good right now. Wish us luck.
A) we have to get some kind of written confirmation from Salt Lake City, that this lot is indeed a buildable lot. It currently doesn't conform to zoning requirements for building in the zone, but if at any time during it's existence it did comply, then it is grandfathered in. The seller says she had a building permit before, so it is likely buildable, but we want to confirm.
B) We have to arrange for and get financing for the lot.
C) We have to do some due diligence with an architect and a builder to make sure that what we want to do is feasible within our budget.
Once we determine that the lot is buildable, have financing, and think we can do what we want to do, we will close on the lot.
After we have closed we need to let the lot loan age for 90 days so that we can "refinance" it into a new loan that will cash out the previous lot loan, provide a construction loan and the permanent loan at the end of construction. This works out well because we will need those 90 days to get designs we like, get them bid, make adjustments and get a building permit.
We will have to put 30% down on the lot, and with the refinance into a one-time construction loan, we will need to have 10% of the whole cost in equity, which the 30% would count towards and take care of. We will end up with 20% down, but if we were to try to do the one-time loan from the start, we would have to have 25% of the total, which is just slightly beyond our grasp, so this all works out fine.
Financing has gotten a bit more difficult in the last few months, but rates are definitely good right now. Wish us luck.
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5 comments:
Congrats and good luck! Is this the same lot you've been eying for the last year? If so, great neighborhood.
Complicated, but SO WORTH IT.
PLUS it means you will both be blogging lots more ;)
Bree,
This is that same lot. We're excited about the neighborhood potential.
Good luck you guys, I am SO excited for you and I can't wait to hear more about it!
This sounds so exciting. I can only imagine what an amazing house you would build. What little I've seen shows that you both have impeccable attention to design and detail.
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