Land or property loans allow potential homeowners to pursue different dreams than mortgage loans, so it is crucial to carefully consider the options before you choose to pursue one of these loans. Are you interested in building your dream home, or do you want to purchase an existing home? For those who wish to design and build a home from scratch, land or property loans are the best options. However, consider the following aspects of land loans before committing to this choice:
- Land loans often bring higher interest rates and down payments since the loan’s collateral, the home, is not currently available.
- Loans on raw land are often the most difficult type of loan to procure because they are essentially speculative investments.
- With raw, undeveloped land, basic amenities like sewers and electrical lines will have to be added, which will increase costs.
Although there are certainly challenges to choosing a land or property loan, they allow homeowners to start from scratch as they develop their dream home. Contact Choice Lending Services for assistance in choosing a loan.