Highlighted
Contributor

I am already preapproved for a mortgage. But im having difficulty finding a suitable home. Can I use my prequalification to buy land and build a home?

1 REPLY

Hi Dm9111,

Sorry for the delayed response, I needed to consult an expert here at USAA. Here is his response:

 

It depends on the builder. Some builder’s will complete construction with their funds and will accept payment upon completion. Others need  money along the way (commonly referred to as draws) to purchase materials and pay workers. Another scenario utilizes a lot loan to purchase the land, the builder places a lien against the property for the sales price, and then the buyer completes a refinance to pay off the lien when construction is completed.  

 

I hope this helps!