The land loans are financing that allows people to buy a parcel of land. Like a home mortgage, people can get a land loan through a bank or lender, who will evaluate the credit history and the value of the land to determine if people are eligible buyers. This article introduce about six types of land loans for you choose.
In the previous post, Infocreditfree.com introduces people to some of the necessary information that is useful for getting the second mortgage to get more information people can read the article Getting a second mortgage to consolidate debts, improve the home… Now, let find knowledge about land loans in the post today.
LAND LOANS
Just like a lot of article posts about loans for average credit, loans for unemployed, government loans, second mortgage, HELOC…. this post about land loans also includes some main parts. They are:
1. What are the land loans?
The land loans are financing that allows people to buy a parcel of land. Like a home mortgage, people can get a land loan through a bank or lender, who will evaluate the credit history and the value of the land to determine if people are eligible buyers.
But unlike a home mortgage with the amount of dollars assigned to the property, it can be more complicated to find out which land is valuable because there is no collateral. That makes land loans a more risky transaction for a lender. As a result, down payment and interest rates will be higher than regular home loans.
2. Some types of land loan
2.1. Local Financial Institution Land Loans
Local Financial Institution Land Loans are right for people who want to deal with someone local that knows the area. Local Financial Institution Land Loans are generally used for purchasing farming land, recreational land, and land in which to build a home or development.
Specific costs, terms, and qualifications include:
- Rate : 4.3 – 6.0 %
- Term: 7 – 30 years
- Downpayment: 3 – 30% of purchase price
- Credit score: 680 +
- Time to funding: Usually 5 – 9 weeks, but can take longer
2.2. USDA Rural Housing Site Land Loans
USDA Rural Housing Site Loans are intended for modest-income and low-income buyers who want to acquire a lot on which to build a primary residence. USDA Rural Housing Site Loans are right if you live in a rural area and meet the requirements about income.
Specific costs, terms, and qualifications include:
- Rate: 3.25 – 5.0%
- Term: 2 years
- Downpayment: 0 – 1.5% of purchase price
- Credit score: 640 +
- Time to funding: Usually 60 days
2.3. SBA 504 Land Loans
Small Business Administration loans are available for land used to construct office buildings, factories, restaurants, etc. Multi-unit buildings (hotels and apartment buildings) are sometimes considered.
Small Business Administration loans are right for business owners that want to purchase land and use it to build a commercial enterprise. Small Business Administration loans are not right for individuals that want to build a personal residence.
Specific costs, terms, and qualifications include:
- Rate: 4.5 – 8%
- Term: 10 – 20 years
- Down payment: 10 – 20% of purchase price
- Credit score: 680+
- Time to funding: Usually 45 – 90+ days
2.4. Home Equity Land Loans
Home Equity Land Loan are right for people who already have a line of credit (LOC) with available funds. Home Equity Land Loan can then use it purchase land to use for personal use, recreation, agriculture, development or business.
Specific costs, terms, and qualifications include:
- Rate: 4.5% +
- Term: 10 years
- Down payment: LTV is usually 80-90%
- Credit score: 620 +
- Time to funding: Usually 3 – 6 weeks
2.5. Seller Financing
Seller Financing is fairly common on raw land, particularly in rural communities. Seller Financing is often right for people who can’t qualify for another type of land loan.
Specific costs, terms, and qualifications include:
- Rate: Generally 6%+
- Term: 5 – 30 years
- Down payment: Varies, but generally 20%+
- Credit score: Some sellers check your score and others don’t
- Time to funding: As little as 2 weeks
2.6. Land Company Loans
Land Company Loans are right for people who find a piece of land and want to finance it from the same company. The types of Land Company Loans vary and can be used for agricultural or building a house, or sometimes even commercial purposes.
Specific costs, terms, and qualifications include:
- Rate: 5.5% +
- Term: 10 – 20 years
- Downpayment: 0 – 5% of purchase price
- Credit score: Many companies don’t check or don’t have a minimum requirement
- Time to funding: Usually 3 weeks+
This post is information about New credit card. Also if you are looking for information about the loans for unemployed, please refer to Getting loans for unemployed is not difficult but you need to have income the link we just provided in the previous article.
If you own a home or an investment property and have a home equity line or are willing to get one, consider borrowing money on your current property instead of trying to secure a land loan. To get more information about home loans in Australia, you should read the article Four types of NZ home loans with the best interest rate you can choose.
Hillary (Team Content) – Land loans