Vacant Land Loan

Many people purchase land for different reasons. The reason can be the construction of the house over the land or it can be the building of some commercial complexes, shop, factory etc or even it can be the construction of the recreational resort etc.

Whatever is the reason, a person has to buy the land as per his requirement like if a person wishes to construct the house on it, and he has to buy the land in some residential area and so on. Thus, the land is always purchases as per the needs of a person. We often use to hear about the purchase of vacant land. The question that strikes the mind of the reader at once is what is vacant land? Let us discuss it in our next part of discussion.

The Vacant Land Purchase

As the name suggests, the vacant land is the land that is available in the raw form i.e. if a person wishes to make use of the land for any of the reasons mentioned above, he has to make improvements on it. It is also to be understood here that many people think that the vacant land is the barren land and it is mostly situated in the far-flung or the deserted areas. But this concept is totally wrong.

This is because the vacant land can be in a developed area; semi-developed area or even it can be in the platted subdivision. When a person goes for buying such land, it is also not necessary that he would be having the required amount to purchase the land. Thus, in such circumstances, if a person wishes to buy the land, he has to take the loan from the various financial institutions like banks etc. The loan taken for the purpose of buying the vacant land is known as the vacant land loan. There are many lenders that are providing the vacant land loan in the present times, and thus, getting the vacant land loan is absolutely no problem. Let us now discuss the various aspects related to the vacant land loan.

The Vacant Land Loan

As said above also, getting the vacant land loan is absolutely no problem as there are many lenders in the market that provide the vacant land loan. Before a person goes to take the vacant land loan, there are of course some aspects that need to be understood completely so that a person can comprehend the vacant loan better. The vacant land loans are different from the other types of loans that are given for the purchase of property as these have been specifically designed for the borrowers who wish to purchase the parcels of the vacant land, which are of course the parcels of the unimproved land and it can be situated anywhere as described above also.

Now let us discuss the eligibility regarding the vacant land loans. Before we discuss the eligibility regarding the above type of loans, it is to be understood here that each lender has its own criteria for the eligibility and thus, it is not possible to describe them all here. But these can be easily described in a generalize manner and should be understood in that perspective only. First of all, the maximum amount a person can get under the vacant land loan is for the purchase of 10 acres of parcel. However, a person can also get the loan for the 20 acres of land and it differs from one case to another. The other criteria that need to be understood here is that a person can get the vacant land loan either in the form of fixed loan or the adjustable rate loan. In the case of fixed loan, the rate of interest that would be applied on the loan is fixed and thus, is not affected by the changes in the interest rates of the lending institution.

As far as the loan amount is concerned, a person can easily get the loan amount from $5000 to $200000 under the vacant land loan. One of the criteria for which almost every lender goes for is that the property to be purchased out of the loan amount must be categorized for the residential or the agricultural purpose and thus, a person cannot get the vacant land loan for the purchase of commercial activity or for any other type of industrial activity. Before a person goes for applying for the vacant land loan, he must confirm that the electricity is available at the land. If the land is not supported by any municipal or sewer lines and the water is also not available there, the proposed land must the able to provide for the digging of well as well as the septic system.

Thus, there are many criteria that have to be fulfilled before a person can go for the vacant land loan. The various criteria discussed above are not absolute and as said above also, these vary from one lender to another lender. There is also some down payment that has to be made by the borrower and it also differs from one lender to another lender. Generally, a person is required to give about 20% of the cost as a down payment if the land is in the platted subdivision and this payment goes up to 25% if the land is in the stand-alone location and a person can get refinance also for the payback of the vacant land loan. As said above also, there are many lenders that are providing the vacant land loans and thus, a person should compare all of them before he can go for any one of them.

The best vacant loan lender would be having the lower initial rate, would ask for the low monthly payments and the payments would amortized for 30 years, it would not ask for any prepayment penalties and it would also provide the interest rate protection with the competitive rates to the person who wishes to take the vacant land loan. Thus, a person should see for the above facilities that are being provided and only then, he should go for any one of them. The interest rates also vary and in the present times, the interest rate for the 30 year fixed vacant land loan is about 6.25%. If the loan is to be repaid in 15 years at fixed rate option, the rate is about 5.8%.

Thus, vacant land loans are of course available

So, if you wish to buy any vacant land piece and you are running short of money, you can easily go for the vacant land loan. Getting these loans is quite easy as there are many lenders that provide the vacant land loan at affordable prices. The only thing is that a person has to compare the interest rates and other charges of the various lenders so as to go for the best one.