Land Loan [mortgageloan-processor.blogspot.com]
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mortgageloan-processor.blogspot.com A mortgage that is easy to land
There are some risk factors on investing on land. Most of the investors wants a return on his investment, so investing on undeveloped land may be riskier at times, because undeveloped land doesn’t produces any returns.
Those who are taking a land loan would be asked about the cause of the loan, if the land produce any revenue then the there is less risk, where as entertaining use is considered to be more risky.
Down payment for a land loan:
The down payment for a land loan varies from 5% to 20%. Each land lenders has different parameters for the down payment of land loans which depends mainly on three factors:
·  The capability to repay the loan
·  How long before construction
·  The purchase Value
· Security value from land already ownedÂ
The ability to repay the loan is the first priority to any lender.
A detailed analysis is done on the applicant who is taking the loan based on his monthly income, income tax return, credit history etc. If a solid repayment capability is determined then the amount of the down payment is decreased else it is increased.Whenever a land is purchased an appraisal is done which says about the value of the land at the time of purchasing. The land loan lenders require an appraisal to ensure the value of the land based on which the loan amount is determined as a percent of the lowest value of either the appraisal value or the purchase amount.
Some lenders offers other alternatives like if the person taking land loan has property of substantial equity then the amount of down payment can be reduce or removed.
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Time taken to process a land loan from application to closing:
However the time may vary but the average time to process a land loan from application to closing is 2 weeks.
There are certain factors which determine the land loan time line:·  Pre-approval process
·  Approval time
·  Title work
·  Communication between the lender and the borrower
The pre-approval process depends from lenders to lenders. The lender requires various information about the borrower before he grants the loan. If the borrower co-operates to give all the information quickly without any faults then the process can be quickened. After the verification is done the lender grants the loan.
To create the exact value of the land depending on the size of the landpurchased, location, type of use, and availability of appraisers a quality appraisal should be very detailed all these cause the total appraisal time to vary. Typically a land loan appraisal time is 2-4 weeks.
A title for a land loan needs a title commitment. Title verification is done to check whether there is any hidden judgment against the title. If any hidden problems are found it may increase the time period. The title work doesn’t require more than a week to complete.
If the communication does not happens the process of completing and closing on a land loan can be delayed. Lack of contact can cause frustration. A constant update loan from the lender should occur stating the time by which the loan might get closed which gives the borrower a little relief.
Because there is a limited amount of lenders who offer land loans and land loan is a little riskier, this makes it harder to obtain a land loan.However I hope this site would help you to get a brief idea about land loan.
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