land Loans

Loans for Land

Land loans basically work the same way as a standard home loan, except several Mortgage Brokers and Banks have only a 0.1% increased interest rate. This extra 0.1% stays on until a house is constructed on the property. Once constructed, the interest rate reduces on the loan.

Always talk to more mortgage brokers than just your bank. Be skeptical and persistant.

Subdivision - Existing or Planned

When it comes to subdivisions a reputable mortgage broker or a bank will allow you to borrow before the land is subdivided. Keep in mind that the loan is based on the value of the un-subdivided property which means that the land would be worth less than if it was subdivided (1 larger block is worth less than 2 smaller blocks).

You can borrow on the value of two blocks of land once the titles have been issued, which is also when you can borrow on the construction.

Rural Land Loans

In terms of rural land loans, it is normally very complex, but a reputable mortgage broker can arrange for a rural loan through some of the major banks. Use their experience and negotiation skills to get you the loan you need. Tthe loan to value ratio would be reduced to around 60-70%.

Have questions? Need help?

Contact several Mortgage Brokers and your Bank.