So I totally get the idea of wanting to not have a mortgage. In fact, that is one of the current drivers behind be seeking to build our log home BnP style. The curse of the blessing of living in a county that is fast-growing and property values are rising oodles... my taxes keep going up and I'm just paying a whole lotta $$$$ each month that ain't really doing anything for me. That's just one part though.

At any rate... yes the ideal is to get owner financing on the property and then build with cash (or pay cash for your property and cash for the build, not an option for me). Aside from owner financing then, you're going to get a loan at least for the land. So I'm weighing the option of getting a "land loan" that typically runs about 1% higher on interest compared to a typical mortgage, vs getting a mortgage. I should have enough cash from selling my current home to do the actual build, so the ending loan amount either way will be the same with the programs that I am looking at (I've been discussing this with a broker who can do the whole land + construction loan deal + convert to mortgage), and will let me owner-build. I plan on building in a county that provides no oversight in home construction, so while I plan on building to code, I don't really have to worry about all those hoops and red tape.

So to me, it looks like getting a mortgage at say 4.2% is WAY better than a land loan at say 5.2%. The payment will not be a problem either way, and we plan on paying it off as quickly as we can (ideally 6 years or so). I see this as a MORTGAGE FREE OUTCOME as opposed to MORTGAGE FREE NOW (are you really mortgage free if you have a land loan???).

So, am I not thinking about something here?