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Tuesday, February 17, 2009
So you want to buy a piece of land? If you want to buy raw land to build on later or just to speculate then read on. Obviously just like any loan if you have some down payment money it will be easier to get then if you do not.
Banks prefer to loan money to already finished property or to very well laid out plans. If you are buying raw land and have not done your homework then there is a good chance that you get denied. If on the other hand you have put together all the research and proposed it well then you will likely be given the loan. Banks like safety and if you can not show how your project is safe then they will likely deny your request.
Since it is raw land you may have some unexpected hurdles. Banks do not look forward to lending money to project sin the middle of the desert. Instead they want to lend where they can see your vision as well. If you have land in the middle of no where then expect to pay a lot for the financing.
If it is raw land that is not even hooked up for sewage and electricity then the bank will want even more money to finance the project. This is again because of the risks involved from the lenders perspective.
When developing raw land make sure that you first get a staked survey done. This will help you know if your project is even feasible. In addition the bank will like that since it is usually the first step in deciding on a project.
When it comes time to finance the land you may be surprised to hear that a home equity line of credit or a second mortgage is often times your best bet for getting financed. This is because your home represents another piece of collateral. Banks do not like high risk projects.
A land loan can typically be for anywhere from one to about fifteen years long. That is because the bank does not like financing projects out thirty years. Thirty years is a long time and brings in a lot of uncertainty.
If you are investing in the land then you are in luck. In most instances the internal revenue service will let you count the interest as tax deductible. Of course since each situation is different you will want to consult with a good accountant.
Banks prefer to loan money to already finished property or to very well laid out plans. If you are buying raw land and have not done your homework then there is a good chance that you get denied. If on the other hand you have put together all the research and proposed it well then you will likely be given the loan. Banks like safety and if you can not show how your project is safe then they will likely deny your request.
Since it is raw land you may have some unexpected hurdles. Banks do not look forward to lending money to project sin the middle of the desert. Instead they want to lend where they can see your vision as well. If you have land in the middle of no where then expect to pay a lot for the financing.
If it is raw land that is not even hooked up for sewage and electricity then the bank will want even more money to finance the project. This is again because of the risks involved from the lenders perspective.
When developing raw land make sure that you first get a staked survey done. This will help you know if your project is even feasible. In addition the bank will like that since it is usually the first step in deciding on a project.
When it comes time to finance the land you may be surprised to hear that a home equity line of credit or a second mortgage is often times your best bet for getting financed. This is because your home represents another piece of collateral. Banks do not like high risk projects.
A land loan can typically be for anywhere from one to about fifteen years long. That is because the bank does not like financing projects out thirty years. Thirty years is a long time and brings in a lot of uncertainty.
If you are investing in the land then you are in luck. In most instances the internal revenue service will let you count the interest as tax deductible. Of course since each situation is different you will want to consult with a good accountant.
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Spencer's work is showing you how to find mortgage loans bad credit and home loans for bad credit situations.
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4:31 AM
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