Before purchasing a piece of land for sale, it’s important to figure out how you are going to pay for it. Unlike home mortgages, where there is heavy competition for your business, loans for land typically come from the local marketplace.
Many times, financing comes straight from the seller. A typical deal may require a down payment of somewhere around 20 percent and a note that the seller holds for the additional amount owed. The interest rate and terms of the loan are negotiable between you and the seller.
If you don’t finance through the seller, another options is always the bank. In these types of transactions, major banks don’t usually like to get involved. Instead, you should search for a community bank. Real estate agents and title insurance companies in the area should be able to give you advice on the community banks that finance loans for land. You will have a better chance of being approved for a loan if there are improved properties in the area, and if you’re going to be building a personal residence. If you’re planning on coming back to the bank for a construction loan in the near future, this will also increase your chances of being approved. Other factors that influence the terms of the loan include the location, size and zoning of the land being purchased.
If the purchase price of the land for sale isn’t too high, another option would be to take out a home equity loan on your current residence, which will allow you a tax deduction.
These are all great options for financing within the local marketplace to ensure that you are able to purchase your dream property. AllAcres makes searching for land for sale convenient with an easily accessible website that will quickly put you in front of multiple properties. Call today at 855-227-3741 or visit us online today with any questions.