# Property-only Mortgage - Just How Screwed Am I? **URL:** \ **Category:** Factual Questions\ **Created:** [February 1, 2007, 5:36pm UTC](https://boards.straightdope.com/t/property-only-mortgage-just-how-screwed-am-i/390431 "2007-02-01T17:36:48Z")\ **Posts on this page:** 6\ **Page:** 1
**Author:** ![Nawth\_Chucka](https://avatars.discourse-cdn.com/v4/letter/n/c57346/32.png) [@Nawth\_Chucka](https://boards.straightdope.com/u/Nawth_Chucka)\ **Post date:** [February 1, 2007, 5:36pm UTC](https://boards.straightdope.com/t/property-only-mortgage-just-how-screwed-am-i/390431/1 "2007-02-01T17:36:48Z")
Less than a month before I met my delightful paramour last year, I closed on a piece of unimproved property in Charleston with the intent of putting a house on it within the next couple of years. My mortgage rate seemed high at 8.25%, but I was assured by TPTB that when I got my construction loan in 2007, I would fold them together and get a far better rate on a new mortgage. Fast forward to now; I’ve left Charleston to be with this wonderful Doper in Georgia, and don’t expect to return to Charleston for at least a few years, maybe even 5. I won’t be building the house until then, either. Now I have a heavy duty rate and will be paying on it for years more than I expected; can I refinance? Am I stuck? I’ve checked those mortgage calculators, but they’re all for \*\*home \*\* loans, not property alone. Any help, advice or funny remarks will be appreciated by those of you in the know!! ---
**Author:** ![control-z](https://avatars.discourse-cdn.com/v4/letter/c/eada6e/32.png) [@control-z](https://boards.straightdope.com/u/control-z)\ **Post date:** [February 1, 2007, 6:40pm UTC](https://boards.straightdope.com/t/property-only-mortgage-just-how-screwed-am-i/390431/2 "2007-02-01T18:40:43Z")
[QUOTE=Nawth Chucka] Less than a month before I met my delightful paramour last year, I closed on a piece of unimproved property in Charleston with the intent of putting a house on it within the next couple of years. My mortgage rate seemed high at 8.25%, but I was assured by TPTB that when I got my construction loan in 2007, I would fold them together and get a far better rate on a new mortgage. Fast forward to now; I’ve left Charleston to be with this wonderful Doper in Georgia, and don’t expect to return to Charleston for at least a few years, maybe even 5. I won’t be building the house until then, either. Now I have a heavy duty rate and will be paying on it for years more than I expected; can I refinance? Am I stuck? I’ve checked those mortgage calculators, but they’re all for \*\*home \*\* loans, not property alone. Any help, advice or funny remarks will be appreciated by those of you in the know!! [/QUOTE] There shouldn’t be any reason you can’t refinance. The only catch is refinancing could cost you a few thousand dollars, but if you can get a much lower interest rate it should be more than worth it. Check with whatever bank you deal with both, I refinanced my home loan through Wachovia Bank. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 1, 2007, 8:42pm UTC](https://boards.straightdope.com/t/property-only-mortgage-just-how-screwed-am-i/390431/3 "2007-02-01T20:42:06Z")
Most of the calculators are for residential mortgages. Vacant land loans are higher risk, and less investors will buy the, so they usually cost more. This place, for example, adds 1% to the 3/1 ARM rate for vacant land, and imposes a lot of conditions: [Vacant Land Loans | Michigan Credit Union Land Loan Rates | MSGCU](http://www.msgcu.org/products/mortgage_vacantloan.aspx) (it’s a credit union in Michigan, I’m just linking because they actually talk about their rates) This place appears to do vacant land loans in your state: [http://www.vmf.com/financial/land\_finan.cfm](http://www.vmf.com/financial/land_finan.cfm) Yes, you can probably refinance. Will you get a better deal? That’s not clear. ---
**Author:** ![Nawth\_Chucka](https://avatars.discourse-cdn.com/v4/letter/n/c57346/32.png) [@Nawth\_Chucka](https://boards.straightdope.com/u/Nawth_Chucka)\ **Post date:** [February 1, 2007, 9:15pm UTC](https://boards.straightdope.com/t/property-only-mortgage-just-how-screwed-am-i/390431/4 "2007-02-01T21:15:24Z")
[QUOTE=Gfactor] This place appears to do vacant land loans in your state: [| Vanderbilt Mortgage](http://www.vmf.com/financial/land_finan.cfm) Yes, you can probably refinance. Will you get a better deal? That’s not clear. [/QUOTE] Thank you for the link, Gfactor, it was really helpful! I hope I get some good info from them. I hope to get a better deal, I’d hate to have to sell the land now and start all over again when we move to Charleston for good. ---
**Author:** ![astro](https://avatars.discourse-cdn.com/v4/letter/a/9dc877/32.png) [@astro](https://boards.straightdope.com/u/astro)\ **Post date:** [February 1, 2007, 9:51pm UTC](https://boards.straightdope.com/t/property-only-mortgage-just-how-screwed-am-i/390431/5 "2007-02-01T21:51:45Z")
[QUOTE=Nawth Chucka] Thank you for the link, Gfactor, it was really helpful! I hope I get some good info from them. I hope to get a better deal, I’d hate to have to sell the land now and start all over again when we move to Charleston for good. [/QUOTE] I talked with one of our pet mortgage lenders. According to him most buildable lot loans these days are 1-3 year ARMs @ approx 6-6.5%. The placement cost of getting a new lot loan with a different lender is likely to make any savings negligible if your term is less than 3 years or so. He said, assuming your credit is golden, your best bet would be to try and re-negotiate with your existing lender and knock a point or two off. There may still be some service fees involved in this process, although not as many as getting a entirely new loan with a different lender. ---
**Author:** ![Nawth\_Chucka](https://avatars.discourse-cdn.com/v4/letter/n/c57346/32.png) [@Nawth\_Chucka](https://boards.straightdope.com/u/Nawth_Chucka)\ **Post date:** [February 1, 2007, 10:28pm UTC](https://boards.straightdope.com/t/property-only-mortgage-just-how-screwed-am-i/390431/6 "2007-02-01T22:28:46Z")
[QUOTE=astro] I talked with one of our pet mortgage lenders. According to him most buildable lot loans these days are 1-3 year ARMs @ approx 6-6.5%. The placement cost of getting a new lot loan with a different lender is likely to make any savings negligible if your term is less than 3 years or so. He said, assuming your credit is golden, your best bet would be to try and re-negotiate with your existing lender and knock a point or two off. There may still be some service fees involved in this process, although not as many as getting a entirely new loan with a different lender. [/QUOTE] Wow, that was really cool of you to ask on my behalf! Yes, the mortgage I have now is an ARM and I’ve heard nothing but horror stories. Sadly the bank I have my mortgage through doesn’t have a branch within a hundred miles of here, which is ironic as I tripped over them at every turn when I lived in Michigan. ☹ I shall call them and inquire what they can do now that my circumstances have changed.