Standard Types Of Land Loans
If you are interested in buying some land and want to know what type of loan would be ideal then this is the article for you. If you have some money to put in as a down payment then there are currently a few options for you.
Banks will look at your desire to buy land with a skeptical eye. Why do you want it and what exactly do you plan on doing with it. On top of that they will of course wonder how much money you are putting up for the project and how on earth will you make the required monthly payments on it. If you can answer these questions then good for you. If you can not then you are likely in the wrong business. Banks like safety and if you offer them none it will be really tough to get money to buy your land.
Along with the fact that it is raw land there are several other things that also come into play. Possibly the biggest issue is what type of land it is and the geographic location. If your land is in the middle of the dessert then you will likely be denied. If your land is right by a new Wal mart then you will likely be approved. Again it comes back to planning.
If it is raw land that is not even hooked up for sewage and electricity then the bank will want even more money to finance the project. This is again because of the risks involved from the lenders perspective.
Make sure that if you are developing raw land you get a staked survey done and that you know for sure if you can get the required permits and utilities that you will need later down the road. If you have plans to immediately build on it you will have an easier time getting it then if you want the land for pure speculation.
When it comes time to finance the land you may be surprised to hear that a home equity line of credit or a second mortgage is often times your best bet for getting financed. This is because your home represents another piece of collateral. Banks do not like high risk projects.
The typical length of time for a land loan is ten to fifteen years. Remember the underlying theme of a bank loan for land is certainty. The shorter the period that you will need to borrow money the more certainty that the bank will have in your project.
If the land is owned and held as an investment then you may be in luck. Many times the interest involved in land loans is tax deductible. And as we know anytime we can save money from the IRS is a good time.
Banks will look at your desire to buy land with a skeptical eye. Why do you want it and what exactly do you plan on doing with it. On top of that they will of course wonder how much money you are putting up for the project and how on earth will you make the required monthly payments on it. If you can answer these questions then good for you. If you can not then you are likely in the wrong business. Banks like safety and if you offer them none it will be really tough to get money to buy your land.
Along with the fact that it is raw land there are several other things that also come into play. Possibly the biggest issue is what type of land it is and the geographic location. If your land is in the middle of the dessert then you will likely be denied. If your land is right by a new Wal mart then you will likely be approved. Again it comes back to planning.
If it is raw land that is not even hooked up for sewage and electricity then the bank will want even more money to finance the project. This is again because of the risks involved from the lenders perspective.
Make sure that if you are developing raw land you get a staked survey done and that you know for sure if you can get the required permits and utilities that you will need later down the road. If you have plans to immediately build on it you will have an easier time getting it then if you want the land for pure speculation.
When it comes time to finance the land you may be surprised to hear that a home equity line of credit or a second mortgage is often times your best bet for getting financed. This is because your home represents another piece of collateral. Banks do not like high risk projects.
The typical length of time for a land loan is ten to fifteen years. Remember the underlying theme of a bank loan for land is certainty. The shorter the period that you will need to borrow money the more certainty that the bank will have in your project.
If the land is owned and held as an investment then you may be in luck. Many times the interest involved in land loans is tax deductible. And as we know anytime we can save money from the IRS is a good time.
About the Author:
Spencer can show you how to find land loans, mortgages for bad credit, abad credit home loan, and many other types of loans.
posted by Debt Consolidation Loan at
5:39 AM
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