Buying Land With Financing
How land loans differ from a typical mortgage.
Land loans are their own category
Raw land is considered higher risk by most lenders than a home purchase, since there's no structure to serve as collateral. Expect a larger down payment (often 20-50%), a shorter loan term, and a higher interest rate than a standard mortgage.
Improved vs. unimproved land loans
Lenders generally distinguish between land with utilities and road access already in place (improved) and land without them (unimproved). Unimproved land is harder to finance and usually requires a larger down payment.
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