Are Land Equity Loans the Same as Home Equity Loans?

The principle behind land equity loans and home equity loans is the same, but the equity source is different. Just as the title indicates, land equity loans the land is the equity and source of collateral, where as in a home equity loan the equity in the home is the source of collateral.

Land equity loans are more difficult to obtain than home equity loans, however typically land equity loans have lower interest rates associated with them.

If you are planning to build a house on the land you currently own you may be able to use the land's value or if you are still making payments then the equity you have accumulated as the down payment rather than having to provide a cash down payment.

One advantage of land equity loans over home equity loans is that site improvements such as the septic system, well, garage, deck, or a fence can be financed into a land equity loan.

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