Refinance construction loan – options?
by Mortgage Rates on Saturday, October 2nd, 2010 | 3 Comments
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A normal mortgage needs a residence built on the property. Selling might be problematic if the prices of lots has dropped. The may have to start calling around to banks or see a financial adviser (use a fee-based adviser) to get their best option.
NO lender gives a mortgage on vacant land. They either try for a construction loan or sell it
Cyndi
I take it hat they used the ‘construction’ loan to purcahse the lot + construction money to build out the lot? The balance of the construction loan should be still available to pay back, or, substantially reduce the amount owed on the lot.
A construction loan is not an answer unless than plan to build it out (as they should have on this loan).
A traditional mortgage loan is not available if there is not a home on the lot.
They can sell the lot.
I would suggest that the immediate answer is to take the unused construction money and the balance from a homeowner equity loan on their existing home to pay off the construction loan.
They can then decide if keeping the lot or selling it is the best choice for them. Selling a lot, like a home, in this market can be a challenge.
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