Hi Guys. I’ve taken a look at the FAQs and resources provided through this subreddit regarding the housing market and it’s all been super helpful. I had one question that I didn’t quite see answered, so I wanted to ask here.
My wife and I are looking at land that has an old house on it that we want to buy and then rebuild the house at a later date, maybe 5-10 years later. In that situation, what options are there for the mortgage? Would we just have two concurrent loans on one property, the loan for the land and then later the loan for the new house? Is that workable or would we put ourselves at some disadvantages?
Thanks in advance for any insights!
2 comments
The easiest way would be to get a reform loan which includes the cost of buying the house and rebuilding/fixing it up. However, if you want to buy it now so you don’t lose it, and then later rebuild it then it would make more sense to just buy it out without the reform cost included and in the span of 5-10 years just gradually fix it
Low interest residential loans usually require you to buy land with a house on it or to buy land together with a plan to build a house immediately. In the second case you would be submitting the blueprints together with the loan application.
How old is the existing house? Banks give loans only for specific kinds of buildings, buildings of a certain age and construction. The government sponsored flat 35 is even more strict, with a minimum size and a specific floor plan, even specific fireproof materials necessary to qualify for the loan.
There are non-residential loans for buying land with the intention of building a home later, but the interest rate is much higher, something like 2.5 or 3%. Shinsei Bank has one.