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Started By
Message
Financing Land
Posted on 8/31/09 at 7:35 am
Posted on 8/31/09 at 7:35 am
Looking at buying a piece of land in the BR area. I have A+ Credit. Will I need to put anything down or should I be able to get the whole thing financed? The price of the land is 40-50k. Also, what is the going rate on land?
3
Posted on 8/31/09 at 9:29 am to LSU1018
quote:
Will I need to put anything down or should I be able to get the whole thing financed?
Good news and bad news.
The bad news is that most banks require 20% down at least and you'll have to get an inhouse loan which means a higher interest rate. The good news is that if you plan on building there you could roll it into your home mortgage and use the land as collateral for the 20% on the home mortgage so that paying off the lot isn't just buying land but investing in your future home.
quote:
Also, what is the going rate on land?
Just like with all real estate it's all about location location location. If you're buying 2 acres on Highland road just beside CCOL then you may be getting a deal of lifetime but if it's in the middle of the hood you're getting screwed. Land requires more research before buying so be careful. Make sure there are no liens, no underground storage tanks, make sure there is access, survey, no flooding, etc. etc. etc. You have to do your homework.
Something you may want to look into is owner financing but make sure you have a good lawyer who will take care of you. If you do it right you could save thousands but if you don't take care of everything you could lose a lot of money.
Sounds like you need to study some more before you sign any contracts but you're asking questions which is always a good start.
Posted on 8/31/09 at 10:13 am to LSU1018
I found out the hard way that undeveloped land over 5 acres changes the ball game in lending. Like others have said many lenders will require 20% down and the interest rates are less than ideal.
Posted on 8/31/09 at 10:27 am to LSU1018
quote:
Also, what is the going rate on land?
Posted on 8/31/09 at 10:31 am to bayoudude
I bought a lot last yr and needed 20% down. The rate I got was 6% for 13 yr loan, if I recall. I went through E fed. Credit union. Because I plan on building, I went ahead and got approved for what I believe it will cost and just added 20% to that.
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