If you are thinking about investing in real estate, there are some advantages of buying undeveloped property. Know that financing may be a bit more stringent as land loans are considered riskier for lenders potentially.
Here is what you should know about financing land or undeveloped property:
Financing and Terms
Even though buying land is different than buying a home or a business, it still requires documentation to attest to your ability to pay the loan payments. How is your credit score? Look around and compare lenders to find terms that you can live with- and the best interest rates, too.
Brokers and Agents
As with any real estate transaction, it is important to have a broker represent you. You can benefit from their experience and expertise- particularly if you have never purchased land before. They may also be able to point you in the right direction for lenders that offer financing for undeveloped properties.
Incentives and Programs
Always check government backed programs when making real estate purchases that could get reduced interest rates or lower the down payment requirements of your property. Your broker may be able to provide further information.
Plans and Objectives
It makes good sense to develop some kind of plan for your goals regarding the land that you want to buy. Are you going to live on it? Will you be developing it right away? Having some plan moving forward can help tease-out the best financing options for your land purchase. Remember that many lenders require a large balloon payment at the end of your loan agreement; be aware of the terms of your loan before signing.
Thinking about investing in land? Even if you have bought real estate previously, buying land is a bit different. Talk to the professionals at Eagle Bend Capital Financing to learn more about your land financing options today.