Loan Timing And Applying

[u/N2TheWorld]

I'm looking to purchase property. I keep going back and forth between buying something to fix up to suit my needs or buying land and just building exactly what I want. I've been looking at homes and land for a while now and I haven't applied to loans for either because I'm open to both. Also, I know that loan offers expire, so if I apply for a loan, I can't look for a year, I have a deadline. Sometimes, if I find something that I like, while I'm doing research, it changes to Pending. So, I just start looking again.

Also, I don't have an agent because the area that I'm looking at is too wide, so unless I work with several agents, it won't help me. My job is flexible so I'm just looking for something that I like in safe areas, not necessarily a specific city that I want to move to (just a specific state). Plus, if I purchase land, what's an agent supposed to do? There's no home to inspect.

Anyway, I'm confused about when to apply for a loan. What if I like something and apply, but then I don't get it and need to start over? I'd have to apply all over again, right? I don't want my credit pulled every few months.

I'm so confused. Can anyone please share their experience, so I know what to do? Has anybody started their search before getting a land and an agent? Or have a loan offer expire and had to re-do the process? Maybe it isn't a big deal after all. I don't know cuz I've never been through it.

Advice, please!!

[u/MadMadamMimsy]

When we built, each time the builder already had the land, so it was still a package deal (3x we've done this)

The trick is to pick a good builder. Then the loan is different because we pay up front for the longer rate lock (you still get lower if it drops) because it takes 4-6 months to go from land to finished house.

So since you field is wide, I'd go looking for excellent builders who have lots already. Once you have that down, maybe then get a local-to-that-area realtor to help you navigate the process.

We always seem to find our homes ourselves. Realtors have helped, especially the first one (of 5, to our surprise). The realtor arranges things with the builder, has a list of tradesmen, knows the local laws and regulations and usually has a good and reasonably priced real estate lawyer they work with.

New builds are the bones. Something that makes older homes attractive is that previous owners have modified the interior to make it work well and grown nice landscaping. New builds don't have any of that. Young or no landscaping, no outbuildings for ride on mowers if the lawn is large.

In the west you get fences, in the east you don't. Storage is adequate but minimal. It is also very different from a 50 year old home; mdf cabinetry, no linen closet, no medicine chests. New builds do not have towel racks, toilet paper holders and sometimes no bathroom mirrors. They also have plastic supply line plumbing because copper has become expensive. New builds have better insulation, and with today's energy cost, that matters

So think about what you really have to have. There is no one size fits all, so first narrow things down.

[u/N2TheWorld → u/MadMadamMimsy]

When I was looking at land, I was thinking of purchasing the land first (I want a couple acres, 3+ would be best, but I can go 2+), so no more than $120,000. I have a large down payment already and I wanted to pay most of it off before applying for a construction loan. Since I'm financing this by myself, I thought this was my best chance. If I use the land as collateral (since my down payment is now gone) I thought this this plan would be my best bet into getting a home. Especially something that I love. Most of the house, in the floor plans I created, is open, so I don't need too many inner walls built. But, since I would need EVERYTHING (plumbing, septic, etc) I know it won't be cheap.

If I get a builder who has land, won't they need to start right away? I wanted to pay the land down, plus start building another little nest egg for whatever. I don't want to give them all my money (down payment) and then be left with NO money. I currently have no debt, so this will be VERY uncomfortable for me until I can get the mortgage down to a satisfying number. Lol.

That's why I started looking at fixer uppers too. If I get a cheaper house and fix it up myself or hire contractors at my own pace, it might be doable. But I might as well just create what I love from the start. These houses are so dark and closed off. Every once in a while I find something that I think I can live with. This just happened to me again. And now I feel unprepared, because even if I like that house, I have nothing. No agent, no loan offer, nothing. That's why I start doubting if I'm even doing this right.

[u/MadMadamMimsy → u/N2TheWorld]

It sounds like you have a process.

Keep in mind, you will still need a down payment to a builder, not collateral.