Can I Get A Mortgage For Land Only

Loan for raw land.

Can i get a mortgage for land only.

Consequently land loans can be more difficult to obtain particularly if you don t have a definite plan in place to improve the property and increase. It may be possible to get longer term loans lower interest rates and a smaller down payment requirement. A piece of land is seen as riskier collateral for a loan than a property. That s why some qualified veterans will purchase a construction loan and once the construction is complete refinance the new home s mortgage into a va loan.

However va loans for both land and construction are quite hard to find. If your land purchase is bundled with a construction mortgage you can likely get a less expensive amortizing mortgage at normal discounted mortgage rates. The purpose and current use of the land can dictate the terms of the loan. Land loans are a very small slice of the market and tend to be riskier for lenders than mortgage loans says casey fleming a mortgage adviser with c2 financial corp.

In san jose california. You can improve your chances of getting a good deal if you help the lender manage risk. If you re buying raw land you re not necessarily going to get a bad loan. Lenders consider raw land as the least desirable collateral for all land uses.

The main difference between a land loan and a traditional mortgage is the lender s opinion of the collateral. Though they re more common in rural areas land mortgages can be found on urban sites too. Basically you can buy raw land or vacant lots with residential lending up to 160 acres with a collateral loan at bank prime rate plus something say prime 2. Land loans come in all shapes and sizes and are unique compared to existing home loans.

Unimproved raw land is usually the hardest to finance or get with favorable terms. For this reason the type of land you want to buy will play a key role in the terms offered on your loan and whether you re approved. A land loan is financing that allows you to purchase a plot of land. As with a home mortgage you can obtain a land loan through a bank or a lender who will evaluate your credit history and the value of the land to determine if you re an eligible buyer.

You can get a mortgage for land only or for land that already has property on it. Va loans can t be used to buy only land but they can be used to finance construction loans.