Need help for Lot Loan

Im working with clients on a 2 tax parcel deal, 1 fixer home & the adjacent lot (water, electric, no sewer/septic). We closed on the home about 3 months ago and has since been remodeled. They have equity in the home, but unsure on what would be the best route to go.

The sewer is 210ft away @ $200/ft (per city), although I did some research and we can get a drain field easement to allow a septic/drain field design. But need to close before 08!

Loan amount would only be $40K w/ maybe a 5 yr note

Assessed value: $88K
Purchase Price: $56K

Thanks :help

If they plan to build immediately, you get a construction loan for the whole deal; land home package. That’s usually a reasonable loan.

Mortgage on bare land is a bit more difficult and usually it’s a pretty expensive rate. If they can take out an equity loan on something else and pay cash for the land, that might be their best option.

I’d insist upon a perk test and septic permit (contingiency) before I’d buy it, unless they can afford the sewer hook-up fees if they have to pay them.

Just because there is room for a septic doesn’t mean you can get a permit for one


Thanks for the reply…The sewer is not an option, but I thought since all the homes on this street have septic systems that it was pretty safe to assume that this wouldnt be an issue. Also, looking at the soil samples on this whole area is 99% “Alderwood gravelly sandy loam” soil w/c is great for drain fields…Anyways this dosent help my financing situation b/c all the hard money quotes I got are 10pts w/ 14% apr on a 2yr note. I am looking for a 3-5yr note. Am I nuts??

btw this is near Seattle Wa