Land Purchase Loans
If you’ve found the perfect spot to build your home a land purchase loan can help you finance the purchase of the lot before you are ready to start construction. Land-only financing is different from a home loan because the property is typically undeveloped and therefore more risky to the lender.
Key tips for when you want to get a land purchase loan:
- Always have the property professionally surveyed before you buy. Make sure you have all of the information regarding property lines, easements, and access. You also need to be sure that the property is properly zoned for your plans.
- It’s easier to finance property that has some improvements such as cable, electricity, sewers, water, even roads to get there that add value to the land.
- Raw land generally requires a larger down payment in order to get a land purchase loan.
- Some property loans are categorized as commercial loans by the underwriters and the loan process will be considerably different than qualifying for a residential loan.
- Depending on your income, where the property is located, and your intentions for the property, there may be government assistance available to help with the purchase.
- Whether you build right away or not you will owe annual property taxes and you need to be prepared for that.
Land Purchase Loans provide financing for when you find a lot where you’d like to build a home and the land is sold without a home on it already. Improved property is easier to get a loan for than unimproved property.
Advice on finding the best land purchase loans:
To get the best land purchase loan, you need to be prepared to explain your plans for the property and the value of the land. Lenders are more willing to finance buyers with immediate plans to build as they generally expect to be paid off once a mortgage is secured on the finished construction. Take time to compare all of the different loan programs available to find the best rates and terms for your credit rating.
Land purchase loans can help you buy property for the home of your dreams. Spending time to research the best loan programs will pay off and help you get the land you desire.
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