Buying the land is like buying anything else except it’s impossible to move. Usually if you are working with a builder in an established subdivision, one contract covers your purchase of the lot and the home. If you select an individual site and intend to work with a custom builder, you will probably purchase the lot using a separate contract.

You can pay cash for your lot or you can finance it. Once a lender has prequalified you, you are in a better position to make decisions about how much of your resources you want to commit to a land purchase. The same entities that offer loans for homes will typically offer loans for land purchase. Keep in mind that this creates a monthly liability on your financial statement that may affect your construction and mortgage loan qualification. Making the land purchase contract contingent upon your approval for construction financing is a good idea in some cases.

When purchasing a lot, use a written contract that specifies the location, includes a survey, and describes the exact terms of payment. A title search should be performed and title insurance purchased. Either way, you are one step closer to building that new home.

Jimmy Miller Construction Company

363 Highway 149
Clarksville, TN 37040
(931) 553-4044

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