Lot Loans

[GreenWaveDave]

Are any banks financing vacant lot loans down there right now?

If so, which ones and what kind of rates, LTV's, terms, are people seeing?

 

[TooFarTampa]

They are really hard to get.

The best deal we could find a couple of months ago (right before the credit market began imploding) was 7.25 percent through Huntington Mortgage. Their service was good and everything went smoothly. They wanted either 80 or 90 percent loan to value, I can't remember.

We tried a mortgage broker and he was talking about 9 percent. Another broker didn't have anything for us. Wells Fargo was at 8.25 percent I believe with 75 or 70 percent loan to value. USAA was the second best deal (7 3/4 or 8) but wanted about 70 percent loan to value.

Good luck!

 

[Lisa Ruby]

Destin First Bank 269-1201 or Compass Bank 269-6992
Should be able to get 7% or possibly lower.

 

[Joe Mammy]

I have a closing tomorrow on a Bayfront lot in Walton County. My clients got good faith estimates from Compass Bank, Sunshine Mortgage, Wells Fargo and Florida Financial Services.

They ended up going with Compass on a 80% LTV 5 year balloon amortized over 180 months for 5.5%.

 

[TooFarTampa]

I have a closing tomorrow on a Bayfront lot in Walton County. My clients got good faith estimates from Compass Bank, Sunshine Mortgage, Wells Fargo and Florida Financial Services.

They ended up going with Compass on a 80% LTV 5 year balloon amortized over 180 months for 5.5%.

I would stay away from a balloon unless you are sure that you will be able to pay it off in 5 years or that the lot will not be worth less. If it's an expensive lot, it would be rather painful to bring tens of thousands of dollars to your own refinancing.

 

[Miss Critter]

I would stay away from a balloon unless you are sure that you will be able to pay it off in 5 years or that the lot will not be worth less. If it's an expensive lot, it would be rather painful to bring tens of thousands of dollars to your own refinancing.

Is a balloon a good idea if you know you will build on it within the 5-year time frame? How are construction loans faring?

 

[TooFarTampa]

Is a balloon a good idea if you know you will build on it within the 5-year time frame? How are construction loans faring?

Don't know anything about construction loans. But if you KNOW you will build, then a balloon is just fine.

We bought a lot five years ago with every intention of either building or selling by the time our balloon loan ended. Things change. We definitely plan to keep the lot, but may not build for 10-15 years.

Refinancing our balloon was a bit tricky because not only did we have trouble finding a non-balloon loan, the lot appraised for a ridiculously low price even by today's standards, 20 percent less than we purchased it for in 2003. The only comps the bank came up with did not have a gulf view, which our lot has. The bank reviewed the appraisal and the refinancing eventually went off without a hitch. But it was still a reminder that a so-called end user without payment issues and acting in complete good faith could get caught in the downward real estate spiral.

I tell the story just as a warning.

 

[Beach Runner]

Then the next question after getting loans for the lot and construction is how hard is it going to be to find wind insurance if the lot is south of 30-A? I'd hate to have jumped through the hoops of financing and built a house for which I can't get insurance.

 

[AAbsolute]

Then the next question after getting loans for the lot and construction is how hard is it going to be to find wind insurance if the lot is south of 30-A? I'd hate to have jumped through the hoops of financing and built a house for which I can't get insurance.

New construction will be wind insurable.

You may want to take a lot loan that contains a future advance clause. It's a standard provision that may help you later. Many times the future advance provision totals twice the lot loan.

 

[Miss Kitty]

Gives new meaning to the phrase...dirt cheap!