Secure a loan

[tiffanymariko]

Secure a loan. Taking out a loan for raw land is tricky and much more difficult than getting a loan for an existing home. This is especially true if you plan to wait years to build. Banks fear the building plans will not come to fruition or you will walk away from the land if it does not appreciate in value.

• You can minimize the risk of rejection by going in with a very specific plan, and proving you've done adequate research and practiced due diligence to assess the land for your personal needs. If you've contacted the above companies, departments, and professionals you're far more likely to look invested in your plans for the land and therefore be approved for a loan for a down payment.
• Work with local banks and credit unions. They're familiar with the area, and will know you're making a wise, well researched investment.
• Remember, your land is undeveloped so down payments and interest rates will be higher than for a typical home mortgage. Keep this in mind as you plan financially for your loan.
• Your credit score may also have to be higher to buy raw land as there is no building as collateral.