Can I Get A Mortgage For Land Only

In san jose california.

Can i get a mortgage for land only.

People are much more likely to walk away from a land loan than a mortgage potentially leaving the lender with an unimproved parcel of land which they will have to sell to recoup their losses. If you re buying raw land you re not necessarily going to get a bad loan. 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.

Though they re more common in rural areas land mortgages can be found on urban sites too. However va loans for both land and construction are quite hard to find. The purpose and current use of the land can dictate the terms of the loan. 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.

It all depends on where you re buying and what you plan to use the land for. You can improve your chances of getting a good deal if you help the lender manage risk. 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. You can get a mortgage for land only or for land that already has property on it.

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. The main difference between a land loan and a traditional mortgage is the lender s opinion of the collateral. It may be possible to get longer term loans lower interest rates and a smaller down payment requirement.

If your land purchase is bundled with a construction mortgage you can likely get a less expensive amortizing mortgage at normal discounted mortgage rates. Unimproved raw land is usually the hardest to finance or get with favorable terms. Va loans can t be used to buy only land but they can be used to finance construction loans. Loan for raw land.

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. As such there s a massive amount of variety from one land mortgage to the next.