Understanding the 3 Kinds of Land Loans
Last updated 1 day 10 hours ago
Land loans are almost as diverse and complicated to understand as traditional home mortgage loans. Luckily, we have a quick summary of the three main types of land loans for you. Let's take a quick peak at each of the three types:
Raw Land Loan
Raw land loans are for land that has absolutely no development or improvement at all on it, like former pasture land. There would be no power lines run, no sewer or water lines, no septic tanks, no lights, no curbs or sidewalks, and usually no roads. This kind of loan can be hard to obtain, and the stakes are higher for mortgage companies, so borrowers are often asked to provide more information for a raw land loan than for other types.
Improved Land Loan
Land that is being considered for an improved land loan will have had some improvements made to it. Utilities have been installed and roads have been cut and paved. These loans are a little less risky for loan companies to finance because of the improvements.
Commercial Construction Loan
Construction loans can be obtained for land that is intended for development. Builders will generally purchase the land, and build houses, shopping centers, or business offices on the site. These types of loans also require more paperwork and information to secure them.
Depending on your plans for the land that you are considering to purchase, you may choose one of these options for your financing. The condition of the land and what you will do on the land will determine what kind of loan you need.
If your seeking advice about figuring a land loan, or if you are searching for a home mortgage loan, call American Home Funding. Our loan experts can help you find the best loan. Contact our mortgage specialists today!
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Saturday, March 5, 2011
Understanding the 3 Kinds of Land Loans - American Home Funding
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