Is it possible to finance a parcel of land (2-5 acres) with no structures on it. Example: buy land now that I intend to build a home on within the next 10 years. Would it be a mortgage or classified as a different type of loan?
2007-01-03 07:50:58 · 7 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
Yes it can be financed with a mortgage but with a much lower loan to value. ( Mortgage is a certain type of a lein that goes away or "dies" when the total is paid off. based on some french word "Mort" meaning death)
Maybe the bank would loan 50% of the purchase price and would require that comparable sales in the last year of similar properties in the same general area supported the price that you were paying for the land.
Another option is to see if the current land owner would finance the property for you for a certain period of time.
2007-01-03 07:58:39 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Yes, it is possible to finance this. It would be considered a real estate loan, not a mortgage loan, and you would have to put significant money down on it. The bank I work for would only finance about 65% of the value because land is a speculative investment. But it should definitely be possible for you to finance this through a bank that deals with commercial and real estate loans. There are alot of them, so just about any you go to can do this. Might have some trouble getting it financed through a credit union because they generally are smaller and won't finance something quite as speculative.
2007-01-03 07:55:13 · answer #2 · answered by theeconomicsguy 5 · 0⤊ 0⤋
It's not a mortgage. It can be financed. It's usually just a personal loan or a secured loan, but not a mortgage loan.
2007-01-03 07:54:50 · answer #3 · answered by N0_white_flag 5 · 0⤊ 0⤋
it's a land loan. You will probably need to put at least 20% down.
2007-01-03 12:12:47 · answer #4 · answered by Anonymous · 0⤊ 0⤋
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2016-10-06 09:32:53 · answer #5 · answered by ? 4 · 0⤊ 0⤋
No it is still a mortgage. Usually they require a higher downpayment.
2007-01-03 07:53:38 · answer #6 · answered by Anonymous · 0⤊ 0⤋
I work in many states doing loans and can help you if you are interested- Yes- you can finance land- please contact me if your interested and i can help you! :)
nic393@gmail.com, richardsonshomeloans.com
GL
2007-01-03 07:55:29 · answer #7 · answered by 3Diamonds 1 · 0⤊ 0⤋