Land Buying Process for Land and Lot Loans

January 1, 0001

How much money do you have to put down:

Lot loans range from as little as 20% down to as much as 40% down depending on the amount of acres, credit score, loan size and if the parcel is classified as “improved” or “un-improved.”

Is there a maximum lot size for a Lot Loan:

The lot should be less than 10 acres, although slightly larger parcels may be acceptable if in a subdivision of similar parcels, and vacant lots of similar size have sold recently in the area. 

Can there be an existing structure on the parcel:

No structures are allowed on the parcel, even if having virtually no value, or having no value attributed to them.

What about a lot that has a foundation already poured:

If the vacant lot has a foundation, this is probably acceptable, particularly if no work was done recently, and it is a slab foundation.  Retaining walls may be allowed as well, depending on the situation.

I already own a lot on a Private Note, Can I refinance the lot:

Refinancing a vacant lot is possible.  Typically these can be financed 65% to 70% of the current appraised value on a lot loan refinance.  A refinance of these types of lot loans are particularly useful if the borrower is not ready to build, but faces a balloon payment on their current lot loan

What is the typical term of a lot loan:

Lot loans typically are fixed for 3 years, and then adjust annually the next 27 years,  so they never have a balloon payment due.

– OR –

The other popular lot loan is a 15 year fixed, but this creates a much higher payment and typically has a similar rate to the 3 / 1 ARM products.

In case you haven’t found the answer for your question please feel free to contact us, we will be happy to help you.

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