Advice from the mortgage pro's

[Anonymous]

I want to build a house on my exsisting property. My current estimated mortgage balance is 89,000 current value is estimated 380,000 with 75% of the appraised value in the land. I plan to live in my current house while building the new and then sale when the new construction is complete. I thought of refinancing with a 100k cash back to start the new build, with ourselves being the general contractor to keep the cost down. By going this route it would eliminate having a construction loan & a mortgage at the same time. What other options or advice can you offer? Thanks for any information that can be offered!

[Anonymous]

No suggestions or opinions at all?

[Anonymous]

Based on your numbers my personal advice would be to refi your current home for the construction costs + 30% (you never know what will come up). Especially since you are planning on selling  your current home after the construction is complete it'll keep costs down, keep you on a fixed rate should the build be delayed since construction loans have deadlines, fees and varying rates (typically higher as well).

Plus, to cap it all off, whoever buys your current home just paid to build your house and you're mortgage free

[ShanetheMortgageMan]

Is this property the existing mortgage & home is already on, or separate property from that?

If this is property the existing mortgage & home is already on - how do you plan on selling just the home, or do you plan on subdividing it?

If you plan on subdividing it, and if the amount you sell the other home doesn't pay off the existing mortgage and you aren't going to bring in the difference to pay it off... then selling some of the collateral that the lender is using would very likely trigger a "due on sale" or "acceleration" clause in your mortgage for the remainder of the balance to be paid off immediately.  If you will be paying off the mortgage, then I don't see subdividing the land with your existing home on it being an issue... but you wouldn't want to subdivide until you got your current mortgage lenders permission (so you may have to time the sale within days after the subdivision of the land).