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Land Purchase Loans

Land purchase loans are ideal options to buy a piece of land where you want to see your dream home. There are lenders and financial institutions that offer a host of land purchase loans to the borrowers.

About land purchase loans

Land purchase loans are utilized by consumers who want to buy a parcel of land for residential or commercial purposes. You might want to see your dream home located in the right place and these loans ensure just that. When you have chosen the land, you should compare between various lenders that offer land purchase loans and choose the right loan for your needs.

There are limited numbers of lenders that offer land purchase loans. You have to do exhaustive research to find out a lender that fits your requirements. Despite the fact that many lenders will be willing to offer financing for buying a home on a lot, only regional lenders will usually be ready to lend for a vacant plot. There are various terms and conditions laid down by the government regarding purchasing a land as well.

Types of land purchase loans

There are different types of land purchase loans. Given below are some of the popular categories of these loans:

Land equity loans

If you presently own the lot on which your home will be constructed, you can use the value of your land rather than cash in the form of a down payment. In spite of the fact that you are not the absolute owner of the land (that is you are still paying for it), it is frequently possible to utilize your home equity in place of a down payment. The interest rate applicable for land equity loans is comparatively lower than home only loans. One more benefit offered by land equity loans is that the cost of site improvement like a septic system, well, boundary, garage or floor can be financed through the loan amount.

Land development loans

A land development loan is a type of loan which is backed by a mortgage loan to fund the construction, installation or manufacturing of improvements essential to switch undeveloped land into a construction-friendly site. When a land development loan is offered, an unimproved lot is taken and it is split into many smaller but developed lots on which commercial apartments or residences will be built up.

Land purchase loans

A land purchase loan can offer the financing you require to buy the perfect land to put up your dream home. A land purchase loan can help you make the payments for a land before you begin constructing on it. Based on your requirements, you can opt for amortizing your payments completely or make interest payments for the greater part of the term to maintain your payments at a low level.

Raw land loans

Banks and lenders are quite cautious about offering raw land loans due to the complications in assessing the project, environmental restrictions and insecurity elements. The availability of raw land loans depends on the type of property and project. However, these loans are usually attached to the property value and not to the individual credit of the borrower.

Lot land loans

These loans are tailored as purchase money loans for those consumers who are not prepared to start construction at this moment and are not prepared to get construction financing but will be prepared shortly. The land has to be natural for the neighborhood and one utility should be available from the road as a minimum. Propane tanks or septic tanks are satisfactory if these aspects are natural for the area.

Vacant land loans

These loans are customized particularly for borrowers who want to buy plots of undeveloped land or refinance their current loans backed by undeveloped lands. These plots might be situated in improved or plotted sector or might be separate plots.

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