How to buy a retirement property/home

April 28, 2017 8:29 AM

Girlfriend and I found our dream property for a reasonable price. Trying to figure out how to pay for it. We're not sure how best to proceed.

We both have good jobs and excellent credit and we both own homes that we have equity in. We can afford what the eventual payments would be. We have an appraisal in hand that is reasonably close to what the seller wants. Options seem to be 1) second mortgage on one or both of our current properties, 2) get a loan from a bank local to the second property (same state), or 3) try to get a committee loan from a friendly bank local to us now (we have some good connections).

Is there an option we are overlooking? Is this a job for a financial planner or ?

Any help appreciated!

posted by Patapsco Mike to Work & Money (6 answers total)

Best answer: We looked around on this, and came to the conclusion that unless you can find a local bank who's willing to give you a property loan that they can't sell, which will be more expensive than a conventional mortgage that they can sell, your best bet is to refi an existing mortgage on a property with a house on it and use the equity out of that loan.

Because the rates you're going to get with a conventional mortgage are hard to beat, and banks are used to seeing undeveloped property as either something that needs a construction loan (because once you get a house on it you can get a conventional mortgage on it), or as an agricultural investment with some sort of business loan on it.
posted by straw at 10:09 AM on April 28, 2017

Talk to a mortgage broker.
posted by humboldt32 at 10:19 AM on April 28, 2017

Wait, now that I've read straw's comment I'm confused. Is it raw land or is there a house already built on the land?
posted by vignettist at 12:11 PM on April 28, 2017

It reads to me like they each have a house (with a mortgage) now, and they're looking at property without a house.
posted by straw at 2:11 PM on April 28, 2017

Is it raw land or is there a house already built on the land?

they're looking at property without a house.

Except they say it's a "property/home" they're looking at.

From the context, Straw's probably right.
posted by JimN2TAW at 2:54 PM on April 28, 2017

Response by poster: There is an old tear-down home on the lot that hasn't been lived in for 30 years. Siblings that couldn't get along, etc. We each own a house elsewhere. Traditional mortgage brokers/banks don't want to deal with unimproved land/lots that won't immediately become a primary residence- at least based on the calls I've made.

Thanks everyone for the responses!
posted by Patapsco Mike at 4:35 AM on April 29, 2017