Wilmington, NC | +1 910 599 5900

How to buy land to build your own home in North Carolina

There is nothing more enjoyable than going back to a house that you yourself built for your family on your land, but this is often easier said than done. You have to find the perfect place, you have to come up with a design that fits your lifestyle, and then you have to find someone who builds it for you. Although, in the end, it is more profitable than buying a finished house, but building your own house requires well thought out planning and financing. Below are a few tips to help you find the perfect place for your new home, and then finance the construction.

The choice of land for construction:

  1. Consider location

The first thing you need to think about when buying land is the place where you want to live. Would you rather live in nature, or live closer to the city? Do you want to buy an independent plot, or do you buy a plot owned by a developer in a residential community? In each case there are advantages, therefore, ultimately, your choice depends only on your personal preferences. But it is important to clearly understand how your choice will affect your daily life. If you have found the perfect plot, but to get to work you will spend a few hours, then is this what you want?

  1. Think about the future

Many people do not think about it, but it is important to think about what your neighborhood will look like in 5-10 years. You should look at any vacant plot as you would an existing house. If you really like to see a giant field in the kitchen window, you need to think about whether this land will remain empty or if someone can build on it and ruin your view. To get to the bottom of these issues, talk to your neighbors, talk to the developer, and, if necessary, raise the data in the district to find out who owns the sites around you. This will give you a better idea of ​​who you are dealing with and what you plan to build around you in the near future.
It is also a great way to meet people who will surround you every day as soon as you move.

  1. Find out what conditions can be built up the land that you have chosen

Finally, even if you find the perfect offer, you still need to make sure your home is built. It is important to hire a licensed surveyor to confirm that on the site that you have chosen you can build what you have planned. For example, the site may be flooded (covered with water) in certain seasons. Or at the site there are rocky areas that can create additional costs when trying to make a foundation. You should also pay attention to the proximity and accessibility to water, sewage, electricity, gas and other utilities. If your site is located in a relatively undeveloped area, this infrastructure may not yet be connected, which means you will have to pay for the connection. And the installation of lines and pipelines in your area is not an easy task. You will need to coordinate with each company utility connection. Sometimes it can be very expensive, but if you have found your perfect place, it can be well worth the effort and even bring additional income when you sell.

  1.  Additional verification of building land

Finally, we recommend to request in the archive all information about the site. Despite the fact that previous owners are obliged to disclose all information, but this does not mean that they always do. By checking the records, you can see if there are any existing pipelines, septic tanks or wells on yours that were not previously taken into account. More importantly, to know exactly what the restrictions are on construction on this site (how close you can build to the border with someone else’s property). It is important to understand that the area of ​​the land that you bought is not equal to the area of ​​the building that you are going to build there. Your inspector can also help with this by telling you about local zoning laws. Once you get all this information, you will know how much space you can occupy under construction, that you can do that you cannot. These nuances need to be considered when designing your future home.

  1. Financing your project

The biggest concern is usually the issue of financing the purchase of land and the actual construction of the house. It is important to understand that you need not only to take into account the costs of site payment, but also you must cover the costs of design and construction that arise in a short period of time. Fortunately, you have several bank financing options that can cover land purchases and construction costs. Below are three options for the most common forms of lending. purchase of land for construction.

Loan for the purchase of land

If you have chosen a site, but are not yet completely ready for construction, it is best for you to take out a loan for land or a site. Such a loan makes it easy to buy a plot. Thus, you can postpone the construction of the house until you are ready to start construction directly (for example, the project will be ready, or you will sell another property) It is important to understand that a loan for the purchase of a land plot is issued only for the purchase of a land plot and cannot be used for other purposes. Such a loan is convenient if you do not plan to immediately start building and your building plot may remain empty for several years.

As soon as you decide to build – you take a second construction loan or pay these expenses from other sources. Thus you can have two separate loans with different conditions. Also, the terms of lending to different land plots can be very different. The cost of a loan is affected by accessibility to major communications, infrastructure and roads.

Construction loan (construction loan)

As we mentioned earlier, if you already have a plot of land on which you plan to build, you can take a separate loan that will cover the construction costs. Called construction loans, they are best used as soon as you finalize your plans and find a builder you would like to work with. These are short-term loans that cover construction costs, and they disperse funds periodically. Here is what you should know about building loans:

  • Construction loan covers only the cost of building a new house
  • If you already own land, you can use capital as collateral for a loan
  • You can also use a construction loan to pay for land purchases and construction, while your payments will equally cover both land purchases and home construction, while it can also be used to purchase land and to build at the same time

Construction loans are also quite difficult to obtain, as they require a lot of paperwork. To increase your chances of getting approval, it is important that you bring detailed home plans for your lender. You will also need to hire a reliable construction company and provide the contract to the lender.

Long-term loan for the purchase of land and home construction

Perhaps the most common type of loan that covers all expenses at the time of purchase of land and construction, and will later be converted into a conventional mortgage loan. Thus, you make only one payment every month that covers everything. Many people choose this type of loan, because it is much easier than other options:

  • The loan covers all aspects of land purchase, construction and long-term ownership of real estate.
  • You only need to work with one lender and one loan, which means that you need to sign only one contract
  • The loan becomes an ordinary loan after final approval by your home inspection and issuing technical documentation.

If you have more questions or need help finding land for construction in the Wilmington, North Carolina region – contact me today.