To clarify we have 130k for the house, this does not include the sale of our current house in which we will clear around 70-85k. We are trying to wait to lost until the house is close to being completed. Also the price of the house we are building is final it’s a fixed price we agreed on, already when through design and picking phase.

You have good credit scores and fair expected levels of income, but IMO you have a staggering student loan. Why don’t you get a couple of years of steady employment (and increasing salaries) under your belt and make some big payments on your student loan before you take on a half-million-dollar debt? Have you put a pencil to a monthly budget after building such a house? Mortgage, student loan payment, usual living expenses, etc. Personally, I wouldn’t be comfortable with those expenses on a $140,000 annual income.

You sound young. Are you planning a family? What will happen to your wife’s income if babies come along?

You might be able to get a loan, but that doesn’t mean you SHOULD.

One of the most important metrics in determining mortgage approval is debt to income ratio. Lenders will tell you this can be 40% based on gross income. I don't know how people can live on so little, but that will be an important part of this equation. Add up your monthly payments and divide by monthly gross income.

So my debt to income ratio with this mortgage (and my current house mortgage) and student loan debt would be 34%. When my house is sold it would be around 28.5%. My student loan is limited 10% under Repaye consolidation.

You will most likely be approved. A better question as others have asked is whether it is wise to incur this amount of debt at this time. I'm a realtor so I deal with these questions often. If you haven't already done so, play with your monthly budget to ensure your comfort level with this size payment. Are you considering children in the near future? Childcare costs are astronomical, so plan your budget accordingly. With interest rates so low, I'd encourage you to consider 20% down if you can afford the payments. Keep emergency funds on hand, but invest the remainder. Don't go less than 20% down, or you'll be paying PMI (private mortgage insurance) and that is like throwing money out the window. I assume you've also accounted for homeowners insurance and real estate taxes in these numbers.

Yes my payment is with taxes (worst case scenario for my area) and insurance. We are putting 30% down and will have the proceeds from our current house sale sitting in the bank as emergency fund (70-85k). I have done the math with other bills and we have one child already. I’ve considered everything. My worry is my 10-11 months of stable income, but our other stats are good I feel, minus the student debt obviously.

Yes, most lenders want two months of income. Are you working with a realtor? Usually they have good lender contacts. You may want to ask about portfolio lenders in your area as they have a little more flexibility.

We are about to inquire with the lenders that the builder usually uses. There are four different options available. Not working with a realtor on the build. I tried my own lender (Wells Fargo) and they were only offering a variable loan that would transfer to fixed in 2-3 years, obviously I did not want that, so we are gonna try their options.

If you have $240k in student debt & are a new physician (guessing) there are lenders who will work with you & target new grads. Are you in a high upside field? You have great reserves & a paid off lot.

I’m a Physical Therapist and yes PT is something that has high upside and job security speaking generally anyways. Lot is owned by us yes.

Strange that you speak of job security because in this area PT's are contract employees.

As a PT, you should be able to get a physician's loan and most of these criteria used will be bypassed. Ask these lenders right off the bat if they do physician's loans.

Interesting. I will have to look into that, didn’t even know that was a thing.

This may be helpful. https://crnahomeloans.com/2020/02/physician-mortgage-loans-2020/

Given that this is an open chat board, I will stick my nose into your business. I've bought and sold a lot of homes and I am a retired real property appraiser. I've dealt with many projects using these types of loans.

Construction loans are the hardest loans in the world to get because they are considered high risk. The risk can't be sold into the mortgage paper market until completion. To a banker, that means risk. They hate risk. There are a lot of moving parts and most lenders don't do these types of loans. You will need to find a local lender who is willing to do a construction loan. In order to get a construction loan, your credit file will need to be pristine. Lenders only issue loans like these to people who don't need loans. Last project I built, I brought 60% down to the table. and had more in the bank. They were throwing money at me.

Right now is a poor time to try to build. The cost of materials can't be accurately estimated because of supply disruptions. Builders are charging a premium due to skilled labor shortages.

Now for the tough love. While I realize that it is your laudable dream to build your own custom home, I suggest that you hold your land, stay in your current home, save even more money, and wait until you have reduced your student loan to a more reasonable amount.

That student loan is a millstone around your neck. I'd be paying that down as fast as I could. Being free of that student loan is the true definition of financial security and freedom. It will hold you back in everything that you do in the future. Don't let anyone tell you that it is good debt. The only good part of that debt is that it allows you to have a skill that will result in a good living. Get rid of that debt and you will have a great living and quality of life.

If your current home is insufficient for your needs, consider buying a already built home or newly built home. These are easy to get financed because someone else has already taken the risk.
It would potentially provide you with a better living situation than your current abode without the risk of building yourself. You can always build later when that debt is significantly reduced or paid off entirely. Good things come to those that show a little patience. You are well on your way to financial freedom, don't be distracted. Congratulations on your new career.

Appears Tedy Bo is spamming again especially since the site is in the UK and the OP is probably not located there. Different countries different laws even if Tedy Bo is not aware of it.

I'm pretty sure it's a bot, not a real name, and annoying. Just flag it.

I have been flagging but unlike a couple of months ago where a flagged post would disappear from the thread or at least where I can see it the post's now stay.

I'm sure that the staff is having a long weekend, and will review the spam notices when they return to work tomorrow. I am now convinced that "staff" is one part-time person. But, hey, we try.

Hey, spam is gone! Yippee!