Financing is Readily Available for Home Sites for Custom Homes

by John Price on 07/07/10

Financing is Readily Available for Home Sites for Custom Homes

Financing on small acreages and lots is readily available. I cannot remember more than one or two customers being rejected in the last 4 or 5 years by banks I routinely deal with. You just have to know where to look.

If you call a big bank and say you want to buy 2 or 3 acres from me for a custom home, you might get a cold shoulder. If you call the right bank you will get a warm welcome. I cannot name names, but the big nationwide and regional banks do not understand the local product or the local customer.

My product is an oversized lot or a small acreage sold to the end user for a custom home. I cannot remember the last loan turn down when a customer went to a bank I recommended. I have at least 3 banks I deal with locally that know my product and my customer. Down payment requirements vary from 10% to 20% down. Amortizations can be stretched out to 20 years or more, but there will be a balloon payment or interest adjustment in 3 to 10 years. The initial rate will vary depending on how long you want the rate fixed.

Feedback from customers tells me that their ultimate decision on which bank was based some on rates and terms, and a lot on a personality match with the bank. Rates and terms of any bank I send you to will be very competitive. Personality is personality.

The banks don’t really make much money on the land purchase loans. But they recognize that a land purchase customer is likely to be a good long term customer and they hope to make your home construction loan. They want your long term business, they trust my product; and the combination of those two facts makes it work.

If you have good credit, you can get a good loan from a good local bank to buy that special piece of property for your dream home.

John Price