Online House Hunting

buying on land contract...?

I got a call yesterday from someone who we called about property they had for sale (by owner) and she said they would consider a land contract. So it's a really nice 10 acre parcel and we would love to be able to build a home on it in the future (say 2 years from now). To us this seems like it would be perfect cause we're not ready to build just yet and we could take that time to save up for a mortgage and then roll what's left to pay on the land into it. We have been approved for a mortgage, but I think it would be better if we waited a couple years until we are better established credit wise. We can't find anything we really like in our price range anyways so at least we know, when were ready, we can get what we want and it's on land we love. Is this a good idea? Also, all those monthly payments, do they provide any credit benifits, say proof of rent or something like that? We are paying rent right now, but some more proof we can make another payment a month can't hurt, right?

Public Comments

1. Look into your local home buying organization. Here we have a "Department of Development". It's a program set up for first time home buyers. You'll get a tidy chunck of money for the downpayment. You have to spend the entire day listening to how to become a home buyer or you can go there 3 times for half an evening. Personally I don't like land contracts but where I am the property is so high the land contract is a good idea because we'll be able to stay in the town we're in. Supposively we're only going to have to pay $115,000 for a NEW 3 bedroom place. We could buy a 1960 small house that would need work on the inside but we're not interested in that. If you've been approved for a mortage I don't know why you'd want wait? We're waiting because we're waiting for our credit payments to get in the system also there aren't houses available yet. We were told it could be a year before one is available. My advice is to contact your local Development Office and see what programs they offer. More information is always beneficial. As I said I'm not for land contracts but sometimes you don't have a choice really.
2. Payments on a Land Contract are not reported to the credit bureaus and therefore would no help your credit. Essentially, you would be renting the land until you buy it. Fine, if you are not ready or don't qualify for a Lot Loan. Also, you may have to own the land outright to qualify for a construction loan.