For either type of undeveloped land
there are many things to consider before jumping in. At this
point, hopefully, you have already uncovered the basics that you
need to know about buying vacant land, but as a reminder, don't
forget these items....
1) Are water, gas and electric service available? If not, how
much will it cost?
2) Have you checked if sewage is available or is a septic system
required? Can you get a system for the number of bedrooms you
want to build (if you are building a home)?
3) What about garbage collection? How far is the landfill?
4) Have you looked into what easements are on this piece of
undeveloped land?
5) How about soil conditions? Is it expansive? What about a PERC
test for the proposed septic?
6) Have you checked the deed for restrictions and checked how
the property is taxed and zoned?
7) Did you check with Planning and Zoning for any new roads or
improvements planned nearby?
8) Is your focus on buying cheap land for sale? Normally this
will not be a good bet as it is usually cheap for a reason.
9) Why is the acreage for sale? What are the owner(s) reasons
for selling the land?
10) Have you checked on loan financing costs? Land loans can be
complicated. Raw land financing can take considerable effort to
get approved. Land development loans generally require a
considerable larger up-front investment on your part than
residential property loans.
11) Are there any indications of hazardous waste dumping?
Property loans (land mortgages) will be
difficult to obtain if hazardous material is present and cleanup
can be costly.
Loans for Land Purchase
If you want to buy land in Texas and are a veteran, start by
looking into Texas Veterans Land loans. Land loans in Texas
offered by the VA offer more lenient credit underwriting and you
may also be able to get more favorable land mortgage rates due
to your status. If you are not a veteran, you will just need to
bare land loans lender with a focus in the area that you are
interested in. As stated earlier, unimproved land loans (vacant
land loans) are not easy to obtain. The reason is that generally
land lenders are worried that there is no income derived from
owning the property, there are no buildings for collateral and
it will be expensive to develop. This makes loans on vacant land
a more risky proposition to a lender.
Interest Rates for Land Loans
Loans to buy land are almost always more expensive than
residential land loans. Rural land loans, or undeveloped land
loans will have a higher rate of interest and probably a shorter
term, which is all designed to reduce the risk to the lender.
Shop around a lot. For the latest rates on unimproved land
financing, it is best to check with a specialist - a Vacant Land
Mortgages Broker.
If you are looking for recreational land financing, make sure to
look into an "owner financing land loan", especially if you are
buying a piece of waterfront land for sale. Many times, the
owners can offer no credit check land loans where as a raw land
mortgages broker will not approve you under any conditions.
In summary, buying a plot of land is not without hazards and you
should proceed cautiously. Don't be pressured into making a
quick decision. The same is true when acquiring financing for
land loans. Shop around, and if you don't understand everything,
don't proceed.
If
you have decided to buy land for sale, you'll need to do your
homework. The first thing to determine is whether you are buying
land that will be subdivided as lots for sale or are you just
looking to buy bare acreage for sale? Another main consideration
is to inquire if this is land for sale by owner or will you need
