My wife and I are interested in purchasing some waterfront property on Puget Sound in Washington State, but we would not build a home for at least 10 years. Will lenders finance unimproved property? I just want to know what to expect before making a move.
2006-07-16 08:49:51 · 3 answers · asked by matpatstery 1 in Business & Finance ➔ Renting & Real Estate
That shouldn't be too much of a problem but the LTV will probably be higher or lower however you look at it. Meaning they are going to probably want at least 20% down or more.
2006-07-16 09:15:52 · answer #1 · answered by Sam B 4 · 0⤊ 0⤋
Most lenders frown upon lending on unimproved property as if you default there is nothing of value they can sell except for the land. Typically lenders require a substantial down payment usually 30%-50%. You may want to contact a broker instead of a bank as they have lenders who are typically more aggressive. Keep in mind you may pay more for an interest rate due to it being unimproved land. I hope this helps you but if you have any further questions feel free to email me tadgeman@yahoo.com.
2006-07-16 20:06:51 · answer #2 · answered by Dan 3 · 0⤊ 0⤋
Do you own any other property? Sometimes the best way to buy unimproved property is to use the equity from something else. My company does "lot" loans, however, the term is for 2 years, with the ability to extend at the end of that term uncertain. Lenders REALLY want you to build on the land. As someone previously noted, most lenders/investors do not want to end up with your unimproved land, if you decide that you want to stop paying on it.
See about cashing out on your owner occupied, if you can...
Any questions, don't hestitate to contact me.
2006-07-16 23:24:35 · answer #3 · answered by mzfilly 2 · 0⤊ 0⤋