Construction Loan Article Center

Tuesday, July 04, 2006

3. Wouldn't buying a piece of land that is not a finished lot save me some money?

That's an interesting question. The way it works is as follows: the costs of bringing utilities and roads to an unfinished lot are very high. In this sense, the first person to build is actually paying for other people who will build on that same location later on. Therefore, although it is possible to purchase an unfinished lot, the cost would be so high for the individual building his or her home that it is unadvisable. There are land developers whose specialty is to prepare lots for building. They deal with things such as zoning and/or soil issues, roads and utilities being made available to the site and developing a building pad. More than likely, these lots are found in a planned community. It is normally difficult to obtain a construction loan that will include the purchase of an unfinished lot where as you can obtain a construction loan that will include the purchase of a finished lot.

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