Knowing More about Land Loans in the USA and the Technicalities Involved

1. Knowing More about Land Loans in the USA and the Technicalities Involved A Land Loan is a type of a secured or unsecured finance, which is also referred to as ‘Lot Loan’ that is used to fund the purchase of a plot of land. You can thereby utilize the piece of land for building a home or for investment purposes. Qualification for this kind of loan depends on where you’re buying the land and what is the intended purpose behind it. Here, an expert mortgage brokerage consultant like “Affordable Interest Mortgage” can help you secure one such special loan through its vast network of A+ certified lenders that lend on easy terms & conditions, with a relatively quick approval process. This type of mortgage loan must not be confused with a construction loan. But, you can refinance your existing construction loan with a land loan that has better rates and easier repayment terms. Here, almost all lenders would require surveyed boundaries and check zoning restrictions, before approving a loan. A plot which is ‘ready to build’ will lower your borrowing cost, compared to the ones which are not ‘built ready’. Whereas, plots of lands in the rural areas may qualify for a USDA subsidized loan. The different types of land loans are Raw Land Loan, Unimproved & Improved Land Loan. How the Land Loan Process Works and its Approval Requirements? FYI, some of the loans for buying land only in the US may require a significant down payment amount. Therefore, if you’re partnering with a registered mortgage broker, they can help you shortlist a lender that offers a down payment assistance program and better interest rates. As Lot Loans are riskier for lenders, they usually charge higher monthly mortgage rates. Here, you can avail a repayment time, which is spread over a 15-30 year period or even less, depending upon the lending agency. Well, the process of applying for a land loan in Arizona or Colorado is somewhat similar to a conventional home loan. The said lender or bank will perform a credit check, ascertain your employment status, credit history and other financial requirements, before approving it. If you’re lucky enough to get a USDA or VA loan, the interest rates and own payment will be significantly lower, especially if you’re purchasing land in the rural area. The current interest rates hover somewhere between 7-7.5%. You can check out the latest figures in verified sites of the US Department of Housing & Urban Development.