How Land Purchase Loans Can Help

Land purchase loans can assist you in the purchase of undeveloped land or a vacant lot. A land purchase loan is similar to a mortgage in that appraised land is used to secure the loan.

The major difference between a land purchase loan and a mortgage loan is that a mortgage tends to be for developed commercial or residential property. Land purchases loans are not for purchasing a home that is already built, but, as the name suggests, for land alone.

Getting Approved for Land Purchase Loans

If you have good credit and some money available for a down payment, this can increase your chances of approval.

You may have a plan in mind for the development of the land. This can work in your favor when applying for a land purchase loan. Blueprints or a written proposal describing how you will develop the land can increase your chances of getting approved for various land purchase loans. You may even get your blueprints appraised.

Land purchases loans are separate from construction loans, so be sure to consider that when applying. The amount that you are approved for may cover most of the appraised value of the land, and not the cost of development.

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