Prefer to talk in person? Find a mortgage specialist on Zillow
Profile picture for thekov

Construction Loan for 2nd home

I live and work in Portland, OR, but own about an acre of land in Coeur d'Alene, Idaho that I would like to construct a vacation home on.  I earn approximately $110K/year through salaried employment and have been employed at the same place for 8 years.  My credit score is ~700.

I would like to construct a home on that lot that would cost around $230,000, and I estimate the home's value to be $450,000 once completed, making the LTV ~52%.

Based on the estimated monthly payment for a conventional 30 year fixed loan ($1500/month including taxes and insurance), my Debt to Income ratio would be between 46% - 48% with the new loan.

I am interested in learning what options there may be for construction loans based on my situation.

Thank you for any guidance you may have.



  • January 14 2011 - Coeur d'Alene
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (5)

I am a mortgage banker in Coeur d'Alene, and based on the scenarios you have posted I think you have a few options. I think the information you have provided supports what you are trying to accomplish. Since you are not going to move for a few years most lenders will treat it as a second home and you would need to qualify with both payments. If you decide to rent out your current in hoping to use rental income to offset your monthly debts there are a number of requirements to meet, I am not sure if you need to go that direction.

Steve Carlsen
[Contact info deleted by moderator]
  • January 15 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for thekov
Thanks to everyone for your answers.  

To answer Dave's question, there's not enough equity to pull out of my existing home for the other project.
  • January 15 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I am not a lender, but here is my experience from a Realtor view.

This may be harder than you think as the banks are typically over restrictive right now.  For example, I just got an offer accepted on a property for a buyer and they will be keeping their current home as a rental.  However, since they don't have a 12 month history of rents from their current home, they had to qualify based on 100% of the expenses of both homes and none of the revenue as a rental.  I suspect it may be the same for you.

Another option to consider since you already own the land is to build it out and then do a refinance on it based on an 80% LTV or if you are happy with the 50% you are set!

Many times, it is better these days to deal with a "Portfollio Lender" like a regional bank or credit union that isn't concerned about reselling your loan on the secondary market.

I will also check with some of my lenders to see what they might say specifically. 

Jim
  • January 14 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Dan Hughson
thekov,

I forwarded your question to one of the Local Lenders that I work with in Coeur d'Alene. Once he answers I'll post his answer for you
  • January 14 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for daveskow
best bet will be to check with local ID lenders in the area for construction programs ...check with WASHINGTON FEDERAL too

possible to  pull the cash out you need for the const from present home equity?
  • January 14 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.