I apologize if this has already been covered in a separate post or in another forum. My search did not turn up any matches.
If I buy a lot (land) for cash, can I put a lein on this land to get a portion of my cash back out when I get a construction loan? Since the construction loan will pay off the existing leins on the property, it would seem that I could walk away with maybe 50% of my down payment cash.
Make the deed of trust and note payable to a friend or relative or even a corp you control and you could get back all the funds subject to the appraisal of the property of course. Do you plan on getting a loan to build at a later date? If not you could just roll it into one loan at this time. There are mortgage companies that will do a one time close where they do both the construction loan and the long term loan. This would save you points to the lender and closing costs too.
Thank you for the prompt and informative reply, Mr. Stokely.
So the deed of trust and note payable needs to be made out to someone other than me? How separate does that distinction need to be - can it be my wife?
What other things do I need to consider? I assume this needs to be recorded with the county clerk at the time of getting a construction loan to build so it shows up during the title search. Is that correct?
Thanks for the suggestion of doing a construction and long term loan together. This suggestion along with getting some of my cash out of the purchase should make this a good match.
I believe you would be better to do with anyone but your wife. Today you can actually do homestead refinance where you can get money from your homestead within limits and one being the 80% loan to value. There are time restraints too in that you can not refinance until after 1 year. If you use a stranger to do the deal you would not run into that i do believe. The laws are new with not much case law and I am not an attorney. You could use almost anyone to loan you basically your money to do the deal.
The deed of trust would have to be recorded at the local courthouse so it would show up on the title work. You would record as soon as you actually buy the lot.