If you have been looking for a residential mortgage to buy a lot to finally build a primary residence or second home , you are not alone . Not only is there a lack of lenders are lending on residential land but the people who have a somewhat unfavorable terms . The market saw high interest rates and low loan to value ratio .
If you are lucky you can find some local and even some national lenders who lend on Residential Land with decent terms . I am aware of the national lenders who loan in 38 countries with Respect to Loan ratio as high as 80 % and interest rates start at around 3 percent . It will take some searching for this yet . Most local lenders comprised of credit unions . Most credit unions offer interest rates in the range of 6 or 7 % . Also you will see the loan to value ratio of approximately 60 % requirement .
After doing extensive research on what is out there I found that the best deal is 20 % down and interest rates at 3 % or 4 % range.
Transaction costs typically run at around 1 to 2 % of the loan amount . You will have to pay a loan fee , appraisal fee ( which average about $ 400 to $ 600 depending on the size of the cost of the loan and title Title fee is generally set . And to be the same regardless of the title company you end up using .
So , if you can come up with 20 % down , showing good income to debt to income ratio at no more than 45 % and 6 to 9 months of liquid assets in reserve equal to your current mortgage debt and ultimately the credit score in the 700 that you should be eligible .
I think there is no better time to buy vacant residential land . Landowners housing is still sore from the massive price drops they suffered . I believe that the housing land may be most affected by the accident Real Estate because so many mom and pop investors to buy land with the reverse hop . Now many of the investors who are desperate to sell their land that they could not hire and where they pay an annual tax on loan interest if not many .