Alright I am new to this board so sorry if this is already posted. My wife and I own a house in east downtown Houston and there is a lot next to us that we would like to buy (to expand our yard). We don't have 10% for a down payment yet so I wanted to ask if there were other loan options for us. Any guidance would be appreciated.

Current debt:
Mortgage
Car

SteveBott said:

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Have you found a 10% lot loan? normally you need 20 but I imagine you could find 15 if you look hard. 10? I have not seen that loan.

Do you have more then 20% equity in your current home? If so you could take a HELOC second loan up to 80% of your home's value and use as a down payment.

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This is helpful information!

Ironically, I came over to this board to ask a similar question.

My experience in trying to buy vacant land over the past 17 years has been this:

2005, I talked to a lender who wanted 20% down for a residential lot.

2018, I knew I needed 20% down for purchasing a residential acreage lot and had it in the bank. But, once the lender sent it to underwriting, they miraculously discovered that for a lot larger than 5 acres, they needed 40% down which I didn't have at that point.

Wound up getting the owner to finance a 3 year loan for the lot. Had to pay it off as part of the refinance of my primary residence in 2020. The owner was happy to get his money early.

I've got about 50% equity in my house and I'm trying to figure out if I'd want to tap into that with a HELOC to buy another property, or if there's a way I could put 10% or so down to purchase a vacant lot that I'd want to build on.

I feel like there might be some program for purchasing vacant land to build on if you're a Texas Veteran but I'm not totally sure about that.

Different lenders have different niches. If you want minimal down payment find one that really likes vacant lots as collateral. Most do not. Move in ready houses are marketable collateral but vacant lots have much less market appeal. I've reached out to someone with another bank to see if he knows anyone with 10% down. If he does I'll come post it later.

As Steve mentioned a HELOC is the cheapest option to create some cash for down payment if you have sufficient equity.

Where is the lot located? I might know someone that would look at it.

jja79 said:

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Where is the lot located? I might know someone that would look at it.

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It's in east downtown. At the corner of Gillespie street and Hirsch (if that's helpful).

Send me an email which is on my profile. I'll put you in touch with a bank that told me they'd look at it.