Indeed No problem. A Vacant Land Loan or residential Lot Loan is a type of non-QM loan. A residential lot or land loan allows you to purchase the land you've always dreamed of. Our team is here to make the process as easy as possible so you can secure the proper loan for your purchase.
Now is a great time to build, and our affordable financing and payment options offer the flexibility you need to become a landowner with ease. Once you own the Land or Lot we can assist you in obtaining a One-Time-Construction Loan (aka construction to permanent loan, which finances the construction of a house, then converts to a mortgage on completion).
The difficulty or ease of your land loan process will depend on your financial status, your lender, and your plans for the land. If you plan to build on it soon, it will be easier to qualify for financing than if you plan to hold the property. The more stable your finances are, the easier it will be for your lender to help you qualify for the loan.
Both purchasing land and buying a home allow you to own a piece of property, but the financing process is a bit different. Here are some of the most significant differentiating factors between a land loan and a mortgage loan.
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Home loan |
Land loan | |
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Purpose |
Purchase a home that is already built or is being developed by a construction company, usually in a neighborhood |
Buy property with the goal of building a home or to hold onto the land |
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Rates |
Rates are lower because there’s less risk involved because the home is used collateral |
Interest rates are higher as there’s more risk involved because a home can't be used as collateral |
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Term |
Your loan term usually ranges between 15-30 years to make owning your home more affordable |
Your land loan is generally for a shorter period of time if the ultimate goal is to take out a traditional mortgage once construction is complete. Terms may be longer for non-residential land purchases. |
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Overall costs |
Lenders often require private mortgage insurance if your down payment is less than 20% Homeowners insurance is expected |
You don’t have to pay private mortgage insurance There is no property insurance requirement or expectation |
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