Financing Land

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While it is common to be involved in real estate purchases for homes and buildings, it is equally popular to purchase land. There are numerous reasons why a person may be interested in obtaining a land loan. The potential for future building projects may inspire a person to inquire about purchasing land. An individual may be looking for a spot to set up a camper for a getaway.

Finding the perfect location to build a dream house is always a driving factor for financing land. Someone may purchase the land surrounding the residence to provide more privacy and leave a greater legacy for family. Regardless of motivation, there are many viable alternatives for financing land.

Private Sales and Rent to Own

In a time when the economy is strained, many people are struggling to make ends meet. A large loan through a lender may not be possible for numerous reasons such as poor credit or lack of funds for a down payment and large monthly installments. In some cases, the land owner is willing to hold the mortgage and create an affordable payment arrangement.

In a time when there is a slump in the real estate market, this may be favorable for the owner as well. At least there is a monthly income coming in that will take care of taxes and other fees associated with the land.

Commercial Financing Lenders

There are many different lenders on the market that specialize in commercial loans. If the land being financed will be for business or industrial purposes, this is an alternative. Potential buyers may be able to obtain large sums of money based on location, collateral, the anticipated returns and any contributions from sponsors.

Home Equity Loans

A home equity loan may suit one’s purposes for a smaller piece of property or attached property. Cash can be advanced based on the value of the residence and be applied toward the land purchase. Should improvements be made on the land or a new home built, a mortgage will then be established on the new property that can pay off the equity loan.

Bring the Lenders to You

Centralized sites that offer information about financing land and potential lenders is an excellent resource. Individuals can sign in and fill out a free loan application. From that point, private investors, investors and banks will be in touch. In a competitive market, each will try and offer the best deal for a loan and then it is up to the consumer to pick the one with the best terms or that is appreciated most.

Government Assisted Loans

The federal government provides many options for financing land as well. It offers specific programs for farm land, others for environmental conservation and forestry loans. It is possible for a potential buyer to find a government loan that will work for the property in mind even if that was not the initial purpose for buying the land. It’s time to think out of the box, be creative and perhaps go in a new direction with a parcel of land.

There are many options for financing land. Buyers need to realize that it will be more difficult to buy raw land with no improvements and no plans of making improvements. Loans for this type of land are most difficult to obtain and the down payment is generally large.

Land with improvements or plans for future development will be much more inviting in the eyes of lenders and they will offer better terms. With a little research and planning, the best land loans can be found prior to purchasing land. Being educated about options is best.

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