What is a Land Mortgage?
A land mortgage, sometimes called a land loan or a lot loan, is intended to finance the purchase of a tract of land.
Many lenders offer vacant land loans or raw land loans.
Depending on the kind of property you wish to purchase, there are a few different types of land loans:
Raw land
Typically, this kind of land has no improvements, no access to services, and may not even be reachable by road. Although raw land is typically less expensive than the alternatives, financing might be challenging.
Unimproved land
A step up from raw land, unimproved land (also called “undeveloped land”) may have some utilities but not others, like a phone line or a gas or electricity meter. Unimproved land is easier to finance than raw land, although it can still be difficult.
Improved land
A large number of prospective buyers prefer improved land since it provides full utility and road access. Even though it’s the most expensive type of land, it’s also the easiest to finance.
Purchasing land that is currently vacant has a bit of a different process than purchasing an already existing home. Depending on where you live and what lender you use, the requirements may be much more complicated than just purchasing a home.
Financing empty land isn’t as easy as getting a mortgage on a house. Land is a very unique asset that can be used for a multitude of different reasons by a wide variety of customers.
The vast range of financing alternatives for vacant land is helpful since it gives buyers numerous options.
Questions?
Are you ready to start the process?
