Building a custom home on an empty lot is like taking a blank canvas and creating a work of art. Custom homes are a great way to get everything you want in a home in the perfect location. So you went out and found that perfect location. When it comes time to actually purchase the lot, what is better for you: paying cash or getting a lot loan? The answer will vary depending on your financial situation and your goals. To help, we’ve delved into the matter to give you some insight.


If you have the funds available, paying for a lot in cash can have some serious benefits. First, it takes away any interest payments you would have on the lot loan. That can save you thousands over the course of a traditional payment plan. It also saves you big bucks on closing costs like mortgage origination fees and appraisal fees. Money advantages aside, paying cash can make you a more attractive buyer for most sellers. You can sometimes find great real estate deals when you have the cash up front. If you’re buying in a tough market, paying cash can often seal the deal without worrying about financing approval or market conditions.

Paying with cash can also have disadvantages. For one, it could tie up a significant amount of your cash reserve, meaning you might have to take a loan for construction or at least put less money down. It doesn’t always make sense to stretch yourself financially if you can get a lot loan.


If you don’t have sufficient cash put aside to buy your vacant lot outright, then you don’t have much of a choice: you have to obtain financing. Aside from necessity there are great reasons to finance your lot purchase. For instance, many mortgage interest payments are tax deductible. On another hand, putting that cash into other investment avenues, like stocks, can yield a higher return and cover the cost of the loan.

The choice is really up to you and what makes sense for your finances. The best course of action is the one that gets you the most bang for your buck.

Whichever choice you make, call Markley Construction for all your new home construction needs. We are Longboat Key’s and West of the Trail’s trusted custom home builders and are ready to help turn your new lot into the envy of the neighborhood. For more info call Markley Construction today.

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