Vacant Land Loans: Understanding the Basics
Vacant land is an opportunity to do so much. Some investors hold it until it goes up in value. Some homeowners become eager to build their dream home on the land promptly. In both cases, applicants for vacant land loans must prepare themselves for the process.
Although land has value, lenders take a look at the space as-is. Lenders understand that the property becomes more valuable once a home or building exists. However, it’s tough to assess a structure that does not exist yet.
Vacant land is available in several sizes. Most lenders will finance 95% of the property’s value for those measuring 2.2 hectares or less. Land that measures up to 11 hectares often receives 80% of the property’s value in financing.
Providing a guarantor often nets 100% financing with several lenders. If the applicant plans to set up a commercial farm on the vacant land, lenders can offer up to 60% of the property’s value.
During the application process, the lender assesses the location, size, and accessibility. Accessibility plays a role in commercial use properties. It also plays a role in residential properties. Lenders must think several steps ahead. You may like that the property is away from major highways. That might not become the case for future owners.
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Vacant Land loans
To obtain more information about vacant land loans, contact our Mortgage House team. Our loan specialists go through a checklist and the applicant’s financial situation. From there, they help find the best financing solution for each case.