Vacant Land Loans: The Basics
Vacant land poses several opportunities. Owners can wait and let the land’s value appreciate. In other cases, they can build on it as soon as they have the plans and financing. In terms of financing this land, individuals will find that lenders make vacant land loans available to them. However, the loan has several caveats attached.
Land remains a valuable asset. Remember that lenders are not in business to hold land or property. Their business is to issue loans and to process the repayments. When lenders issue loans, they expect that the borrower will repay the debt in full and on time. Otherwise, it puts the lender in a bind too.
Most vacant land loans will fund 95% of the land’s value. Therefore, the borrower must come up with at least a 5% deposit. It also helps to provide plans for the land. If you plan to build on it soon, it puts you further into debt. Thus, lenders want to know how you plan to fund the land and construction.
If you want to hold the land as is in a vacant state, some lenders will accept it. Those who show that they can repay their debt put themselves in a favorable position.
Once you become a Mortgage House client, you receive access to the rest of our loan products including our business loan.
Vacant Land Loans Conclusion
Individuals and investors interested in vacant land loans can contact Mortgage House. Our loan specialists provide more information and can help you start the process. Contact our team today.