Buying land with mortgage

[tprice]

Have no idea how this works, figure someone here may know

Mentioned earlier wife and I “kicking tires” about building a smaller 1 level house

SIL/Daughter have 45 acres and keep asking us to build on their land and move out there and we are seriously considering this in next 2-3 yrs

2 years ago they built house and mortgage is thru Ag South

There is a corner of property that would work great and down road when we are “gone” be easy sell and not compromise their overall property . Probably looking at 1-1 1/2 acres tops

Is it possible to do this without them having to re finance everything??

Years ago wife and i had a neighbor purchase a small strip of land we owned to “square up “ property lines. Bank back then did some type of release and we had it re surveyed at purchasers expense but that was close to 40 yrs ago and I know things have changed a lot

[UPSTATEWATERFOWLER]

I would think they could sell you an acre and the bank would work with them. Pay down the mortgage with the proceeds and the bank’s “risk” (loan amount) would be reduced. That said, I’m not a banker but it seems there is a way to do it.

[Saltydog235]

Subdivide the land off their property and set it up as a separate lot. Buy the lot through a standard REA transaction. Build house.

[Luvin' Labs]

What upstate said. They should be able to sell you a portion. Will probably have to be surveyed etc. I'm sure their mortgage company could answer the question better than most of us.

[SCHUNTINFANATIC]

Their mortgage company may allow them to do a partial release for the small part you are wanting to build on. I have done this before with some property I own.

[tprice]

I would think they could sell you an acre and the bank would work with them. Pay down the mortgage with the proceeds and the bank’s “risk” (loan amount) would be reduced. That said, I’m not a banker but it seems there is a way to do it.

Thanks

This is kind of what I was thinking.

Just like to get all information before we seriously move forward with this

[SaltMuck]

Good advice so far. Ask for a partial release of X acres. You’ll pay appraised value for it unless their loan to value is strong, in which case AGS may release it with no monetary consideration.

[tprice]

Good advice so far. Ask for a partial release of X acres. You’ll pay appraised value for it unless their loan to value is strong, in which case AGS may release it with no monetary consideration.

Loan to value is very strong , my guess is value of house and land is double of mortgage amount at least

I do have few clients that work at AGS(mngr and mortgage broker ). That just dawned on me. I will ask them, seems like one is coming in my office next week

[Catdaddy]

Good advice so far. Ask for a partial release of X acres. You’ll pay appraised value for it unless their loan to value is strong, in which case AGS may release it with no monetary consideration.

^^^this

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[ersepton]

I do not know your situation, but…. And there’s several but’s here, if they are truly in a strong equity position, and they will end up owning the home through your estate, and you have a relationship with who ever owns their mortgage (assuming it was not sold off)…. It would be mutually beneficial for them to “gift” you the lot to build. For multiple reasons, but it will reduce any construction loan, as well as reduce their property taxes, on property they will ultimately own anyway, in fact they could gift you a larger portion, say 50% of the acreage. You would benefit from not paying for the property, they would benefit from you paying a larger portion of property taxes, in the end, they are sole owners of the property, plus the house through your estate. Having a larger lot, would help you in loan to value when you build.
All things to consider, however your daughter and SIL may not see it the same way, and that is their right as well.

[tprice]

I do not know your situation, but…. And there’s several but’s here, if they are truly in a strong equity position, and they will end up owning the home through your estate, and you have a relationship with who ever owns their mortgage (assuming it was not sold off)…. It would be mutually beneficial for them to “gift” you the lot to build. For multiple reasons, but it will reduce any construction loan, as well as reduce their property taxes, on property they will ultimately own anyway, in fact they could gift you a larger portion, say 50% of the acreage. You would benefit from not paying for the property, they would benefit from you paying a larger portion of property taxes, in the end, they are sole owners of the property, plus the house through your estate. Having a larger lot, would help you in loan to value when you build.
All things to consider, however your daughter and SIL may not see it the same way, and that is their right as well.

Understand what you are saying but this is some what unique

First we would build with no mortgage

next the land is SIL family land left to him, their house was built on 1.8 acres as per survey and taxed as Primary residence . Rest of land is under Farm tax .

Also we are 63 & 62 this year , naturally we may have 15-20 yrs left on average . At point of our death home would be asset for our Son and Daughter and more than likely sold . We are looking a corner of property next to property line with woods beside and behind us so if it is ever sold it would not interfere with SIL/Daughter’s home and farm land . House would more than likely be put in Life Estate at some point with Daughter & Son and us each . It is actually a portion of land in all honesty my SIL said he has never set foot on , he is willing to gift us 1-2 acres if AGS would allow that (built in baby sitters LOL) SIL has no family other than us basically

[Palmetto Bug]

You also need to consider access if it eventually gets sold. If you can avoid having to give up a prescribed easement for the new owners to access the driveway to the new house, you can avoid hassles about road maintenance, acceptable road usage, etc.

[tprice]

You also need to consider access if it eventually gets sold. If you can avoid having to give up a prescribed easement for the new owners to access the driveway to the new house, you can avoid hassles about road maintenance, acceptable road usage, etc.

Road frontage in front of this. In fact the entire tract of land is on corner of 2 roads so plenty of road access.

[Duck Tape]

Must perc or have sewer available.

[tprice]

Must perc or have sewer available.

Yep. Several good friends/clients as GC’s. Going to do perc test sometime next couple months to make sure it will perc but should not be an issue looking at elevation