Long driveway and home appraisals?

[IndyIan]

Power is taken care of. We allowed our neighbor to bring the power along the county road frontage across our land, did all of the tree removal for him to save him some money from the utility and split the cost of the power run. It was actually surprisingly cheap for how long the run was.



Wow - I can feel my dreams crashing down around me. lol. Regardless a very good post with good advise. Thanks Frank. I am not independently wealthy but wish I was. I've been maintaining the road since it was put in two years ago since the back of the property is also my hunting place. Right now its not a big deal. An 8 foot brush hog takes care of the mowing easily. One pass down and one pass back up. Would I be able to take care of it in 30 years, 40 years, not sure and something to think about.

One thing we are set on is a timber frame home. After touring several homes in the region I just cant see myself settling for a traditional stick built home. There is just no comparison.



This is one of the things that I really like about the property, it feels like we are at the edge but we really are not. It takes as long to drive our road as it does to get town. Even though our closest neighbor would be about 2,000 feet away, we are 5 minutes to the grocery store and 15 minutes to the mall and movie theater. The property is 2 miles outside of the city limits.

Jeremy

The location does sound excellent! Seems you are on excellent terms with your neighbors but I'd get a lawyers opinion on worst case scenarios if your great neighbor has to sell and some jerk buys it. Then CYA with some road agreement if you need too, and go build your dream home!

An option that might be available for you, is opening a line of credit backed by your property and skip the building mortgage shenanigans all-together. That what we did as we owned our property in full as well when we started building. We never did roll into a mortgage either, the line of credit is very handy if you have variable income too. Some months we pay only a little, sometimes alot.
Only our credit union offered this option, as the banks seem to love those building mortgages! We built alot of it ourselves so we would've had to hire out alot more just to stay on the building mortgage schedule too.
Good luck with your build!

 

[dave1949]

Here in my part of CA any single property owner on a private, unmaintained, road can petition the other owners to start a road co-op. If not everyone agrees, that same person can take it to the county who assigns a judge to force a road co-op by court order. The cost is set proportionally by how far your property is from the public road. Those property owners at the back end of the road pay more of the cost and those up by the public road pay less. Whether you live there or not. Doesn't make a difference if there is a building or not on your property. The county's interest in all of this is to have roads wide enough and maintained enough for emergency vehicle access.

That's roughly the same as Maine. Proportional share based on distance. The road association can put at lien on non-paying properties-I think. Usually a lawyer's breath letter is enough to get people's attention :laughing:

 

[newbury]

<snip> Last thing I want to do is build our home and then not have it meet a needed appraised value due to a mile long drive. Thanks.

Edit: Total acreage is 84 acres.

Jeremy

You should definitely try to find out what the appraiser that your lender will use thinks of it.

I disdane appraisers. The property we bought last year came with a carport next to the house, a deck, a carport, a pool with a deck surrounding it,

(carport and pool/deck)

and 5,500 sq ft of warehouse which has 400AMP electrical service, full flourescent lighting and all thick concrete floors thruout, plumbing in the big one, and a 1 bedroom apartment (about 40x18) w/ kitchen, dining, full bath, a/c etc. in the back of the large warehouse!
.
(warehouses)

All on 3.5 acres, according to county tax records and a later survey.

The appraiser might have done a fair appraisal on the house, (but I think it was way under) however he appraised that carport at $9,000 ($15/sq ft). And then appraised the pool and decks at $4,000 in one place, and gave the appraised value of the warehouses, pool and decks in another place at $14,000. And based the land on 2.5 acres (which the realtor told him), with a value of $12,000.

So doing the math on the evaluation of other than the house:
Open carport $9,000
pool and decks $4,000
5,500 sq ft of warehouse WITH APARTMENT ($14K - $4K for the pools and decks) - $10,000
3.5 acres of land - $16,800 (12000/2.5*3.5)

The discrepancy I see is 5,500 sq ft of warehouse should have been worth AT least $55K, especially with the apartment and the land at $16.8K, for about a $50K difference on a $170K house. And if he had appraised the warehouses w/ APARTMENT at the same value per sq ft he gave the little dippity carport it would have been about a $75,000 difference.

So don't worry to much about appraisers unless they are tax appraisers, because I heard they go the other way.

 

[jk96]

Update............ Talked to our lender today. Apparently the length of the drive is not a problem however the amount of land is. They only do FHA loans on a 30 year fixed and we won't be able to qualify with 84 acres. We have too much land. What I thought was an asset turns out to be a liability. They will need us to survey off a smaller portion of the property and keep it under 20 acres. This leads to additional problems as well because the road has an easement for our neighbor and apparently Freddie & Fanny doesn't care for easements. Looks like I'll be looking outside our current bank for a traditional mortgage.

Jeremy

 

[unbidden]

We have 48 acres with an easement and no problem with financing. In fact we used a 2nd mortgage to satisfy the down payment requirement. It’s time to pick up the phone and call numerous lenders and not just the local ones. With technology many lenders now access the property using Google Earth and you'll hear within 24 hours or less.

 

[jk96]

We have 48 acres with an easement and no problem with financing. In fact we used a 2nd mortgage to satisfy the down payment requirement. It痴 time to pick up the phone and call numerous lenders and not just the local ones. With technology many lenders now access the property using Google Earth and you'll hear within 24 hours or less.

Going to work on checking with other lenders today. It was just preferable to work with our current bank if possible since my personal, business, line of credit, etc are all with this bank. Our current bank has already approved the construction loan and said they have no problem keeping that part of the build if we want to. Just trying to do my homework so that I can make sure that I can get into a fixed rate when we're done and don't get stuck with a ARM.

Jeremy

 

[jk96]

After doing some more checking around today I at least have some clarification on the issue I'm running into. First of all they were not applying for an FHA loan but a traditional loan. Given the dollar amount of the loan and length of loan (30 year fixed) the banks will not take it in-house without having it federally backed. Because of that the house needs to be on a lot size of 20 acres or less. Talked to a few different banks today and all had the same answer. After the housing crash they all want federal backing, which now means a whole lot more restrictions and 20 acre or less parcels. Our only other option is a farm loan but the rates are higher.

This has led to a second problem. Because our build site is so far back, it is very hard to get there and keep the lot at 20 acres. We can't land lock ourselves when we partition the lot off even though the land for the access is still ours. We decided to move the build site about 800 feet closer which allows us to survey off enough land for clear access and a lot around the build site and still keep it under 20 acres. We were actually torn as to which of the build sites we preferred so it's not a big deal to move it. This site offers a slightly better view out the great room which is where most of our time will be spent anyway. I went into this thinking the long drive would be a problem. Turns out it's the amount of land which still makes no sense to me.

Edit: I'm really glad I looked into this. Our construction loan was already approved. Had I built without checking we would have found out at the end of the construction that we couldn't get a fixed rate. Would have ended up in a variable or farm loan at a higher rate.

 

[unbidden]

After doing some more checking around today I at least have some clarification on the issue I'm running into. First of all they were not applying for an FHA loan but a traditional loan. Given the dollar amount of the loan and length of loan (30 year fixed) the banks will not take it in-house without having it federally backed. Because of that the house needs to be on a lot size of 20 acres or less. Talked to a few different banks today and all had the same answer. After the housing crash they all want federal backing, which now means a whole lot more restrictions and 20 acre or less parcels. Our only other option is a farm loan but the rates are higher.

This has led to a second problem. Because our build site is so far back, it is very hard to get there and keep the lot at 20 acres. We can't land lock ourselves when we partition the lot off even though the land for the access is still ours. We decided to move the build site about 800 feet closer which allows us to survey off enough land for clear access and a lot around the build site and still keep it under 20 acres. We were actually torn as to which of the build sites we preferred so it's not a big deal to move it. This site offers a slightly better view out the great room which is where most of our time will be spent anyway. I went into this thinking the long drive would be a problem. Turns out it's the amount of land which still makes no sense to me.

Edit: I'm really glad I looked into this. Our construction loan was already approved. Had I built without checking we would have found out at the end of the construction that we couldn't get a fixed rate. Would have ended up in a variable or farm loan at a higher rate.

I know it's a bit of a turkey shoot; but ask the lenders if they believe you would have a good chance at a re-fi fixed a year after if your were forced into an ARM.

 

[s219]

I know it's a bit of a turkey shoot; but ask the lenders if they believe you would have a good chance at a re-fi fixed a year after if your were forced into an ARM.

I agree, that is the standard practice around here. In fact, the banks encourage it since it helps get the in-house loan (and risk) off their books.

 

[unbidden]

Jeremy, also look into USDA loans.