Make sure that soil percs...if it doesn't, no matter what the "grandfather" issue may be, if it doesn't perc you can't build a septic, or the system may have to be so large that it won't fit on your lot...that would be a make or break deal for me. In our area, wetlands are a huge deal, so if there's anything wet already on the property, that will be another big consideration. Also, do you know what the property was prior to this? Was it farm land or something else. These days you have to know what's in the ground as well as what's on it. (I remember when we were looking an agent said what about this fabulous place...fortunately I lived in the area a long time and remembered when they added the skim coat of fill to the lot before they built the house. No way!) I also would seriously consider buying an existing home over building if my concern was that we were overspilling our current home, as building a custom home can take a long time and it can bring lots of headaches (as well as benefits). If you think you are having a hard time now with trying to get your questions answered, this isn't even the beginning yet. Building will necessarily bring cost overruns. I usually figure it will cost 1/3 more than you think. I also agree with the others about the shared drive. Yuck. I think building a home is a labor of love and only worth it if you love building homes, or if you will end up with something that you love due to a unique piece of property or a home design that is unique to your family's needs and can't be gotten elsewhere. If it's available on the market, even if it will need some reno work to become perfect, go for it....

Hi Lor, I'm assuming the free & clear house is your residence now,yes? If so, each dollar of interest paid on the cashout refi (up to $100k) is tax deductible, but only to the percentage of your aggregate income tax bracket. Each dollar of interest you pay on the rental property is tax deductible 100%... since it's taken OFF the revenues BEFORE taxes. So, my question; What's driving you to pay off the rental? The reduction in interest rate (I'm assuming that's it) would have to provide you equal or greater savings than the loss to you of the greater tax benefits. Cheers, Dave Donhoff Just some mortgage guy ;~)

Talk to your bank. I am in the process of getting a C2P with land I have paid off. What the bank did on the loan was simple. They took my bank accounts, added the value of my land, the value of my current house and called them "assets" Then they subtracted my debt which for me only included credit card debt and real estate taxes but I would assume most may have car loans, mortgauges etc. Using that they came up with a total personal worth. They also compared my monthly income vs the expected monthly payment for repaying the loan. While my payment is going to be about 50% of my monthly income, because my personal worth is enough to cover the entire project, and I have no other outstanding loans and very small CC debt the loan should fly through with ease. I already know this because 4 months ago I sat down with my lender when we got an initial "final" number from our builder and asked her to tell me if I would be approved for that amount or if I needed to start cutting stuff out to get to a lower number. So before I even submitted the final documents I knew what they would give me. Also, at my lenders suggestion, the builder added some extra contigency money to the key contractors bids (framer, excavation, roofer, HVAC) when we submitted the final numbers, so I should have a larger loan approved than I actually need to spend since I don't plan on making any change orders. Every personal situation is different, every bank can be different. Talk to your lender it is the best way to get the answer for you.

New bank does construction loans all the time and approved us even if the loan to value goes above the 80% as our finances are all sound. They understood contingencies, overruns, etc, and will actually be doing $600k so there’s a little bit of buffer. Spoke with the initial bank rep and bank manager today to close out the loan and they both apologized, with rep even saying they were a little worried about other things that may pop up down the road if this had already started with first disbursement - so I think we may have actually avoided a train wreck down the road.