How To Find Land Loans
Many people see a piece of land and think of the different things they could do with it. Some want to build while others think that they could speculate and sell it in a few years for a profit. If this is you then we can help tame your expectations.
Banks prefer to loan money to already finished property or to very well laid out plans. If you are buying raw land and have not done your homework then there is a good chance that you get denied. If on the other hand you have put together all the research and proposed it well then you will likely be given the loan. Banks like safety and if you can not show how your project is safe then they will likely deny your request.
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.
Some people pick land that does not even have utilities available to it. If that is the case then the bank might laugh at you. If on the other hand you have done your due diligence and figured out where the power and water is coming from you have a chance.
If you are developing raw land it is vital that you get a staked survey done as well as have your financial statements in order. The better prepared you are the more the bank will like you and approve you loan.
Surprisingly enough you may be better of taking out a home equity line of credit to buy the land then simply getting a separate loan for the land itself. This comes back to the fact that the bank likes collateral. If they get not only the land back but your house as well in the case of a default then the loan is obviously better secured.
Land loans usually have a ten to fifteen year term. Homes have thirty years but you live in them and they are a finished product. Raw land is not so the bank will not take on the extra risk of sitting on it for thirty years.
If you are investing in the land then you are in luck. In most instances the internal revenue service will let you count the interest as tax deductible. Of course since each situation is different you will want to consult with a good accountant.
Banks prefer to loan money to already finished property or to very well laid out plans. If you are buying raw land and have not done your homework then there is a good chance that you get denied. If on the other hand you have put together all the research and proposed it well then you will likely be given the loan. Banks like safety and if you can not show how your project is safe then they will likely deny your request.
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.
Some people pick land that does not even have utilities available to it. If that is the case then the bank might laugh at you. If on the other hand you have done your due diligence and figured out where the power and water is coming from you have a chance.
If you are developing raw land it is vital that you get a staked survey done as well as have your financial statements in order. The better prepared you are the more the bank will like you and approve you loan.
Surprisingly enough you may be better of taking out a home equity line of credit to buy the land then simply getting a separate loan for the land itself. This comes back to the fact that the bank likes collateral. If they get not only the land back but your house as well in the case of a default then the loan is obviously better secured.
Land loans usually have a ten to fifteen year term. Homes have thirty years but you live in them and they are a finished product. Raw land is not so the bank will not take on the extra risk of sitting on it for thirty years.
If you are investing in the land then you are in luck. In most instances the internal revenue service will let you count the interest as tax deductible. Of course since each situation is different you will want to consult with a good accountant.
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 Credit Counseling at
2:03 AM
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