When you own land and build on it, or buy out a co-owner's share, that's refinancing, not a purchase. The video explains why these situations work differently and what financing options actually apply.
If you own a piece of land and you're trying to get a home loan to build on that land, or let's say that you're jointly on a piece of property and you're trying to change the financing to buy the other person out and get it solely in your name, or any type of scenario like this. If you currently have some sort of ownership in the house, whether you're on the mortgage or if you're just on the title, indeed, and you're trying to get the new financing, since you already have ownership in that property, it wouldn't be considered a purchase. You can't buy the house from yourself. You would be on both sides of the deal. Instead, it would be a refinance. Even if you're dropping somebody else off of that, or if you already own just the land, you would refinance into the home loan to build on that land because you already have ownership. The benefit here is since it's not a purchase, there's no down payment. You can use the equity that you have in that property to cover what would be a down payment. So there are some benefits here, but it can get a little tricky because, you know, if you don't already have the house built, it kind of seems weird you'd be refinancing it and not purchasing it. But think about it like this. You can't be the seller and the buyer.
