Can I Buy Land in Eastern Washington for Zero Down?

Can I Buy Land for Zero Down?

When you borrow money for land lenders see it more as a risk because the loan's collateral, the property, isn't developed or currently being used. Because of this reason, lenders see it as easier for the borrower to default on the loan and leave the lender with the land that's harder to resell without improvements. Typically down payments and interest rates are higher for land loans than they are for home mortgage loans.

Land loans are riskier for lenders because the loan's collateral, the property, isn't currently being used. That makes it easier for the owner to walk away and leave the lender with the land. Because of that, interest rates are higher for land loans than they are for manufactured mortgage loans.

There are current programs that do allow for some types of zero down land loans. These new land loan programs have certain features such as Low rates, Fixed terms up to 20 years, $0 money down on lake front lots, and Low down payments (5% down). Lenders want to know what the land is going to be used for and how you are going to improve it. Many times if they feel the effort will pay off regardless of a default then can offer the loan with a lower interest rate or lower to zero down payment.

Unimproved land, or raw land, with no plans for improvement is the hardest type of property to secure a loan on because it is a non-potential investment. Raw land has no added improvements like sewers, utilities, streets or structures. Without the knowledge of improvements or plans in the works, lenders are much less likely to allow a zero down loan.

Because of this a raw land loan naturally has a higher down payment and higher interest rate than an improved property loan. Some lenders require a 50 percent down payment, but some lenders may only require a 20 percent down payment. A local Chelan Valley lender that is familiar with the property will be more willing to work with you on the loan than a lender unfamiliar with the area.

So what can you do if you want to make improvements in the future?

• Get a staked survey of the property.
• Check out any easements and access
• Get a warranty deed and title insurance to make sure you'll have clear title to the property.

Land loans typically can have a 10-15 year term like a mortgage loan but unlike the tax benefits to a home loan the interest expense on a land loan may not be tax deductible unless the land is held as an investment.

Where do I apply for a land loan?

• Mortgage Brokers
• Credit Unions
• Local Banks

Just as if you were buying a home, a land loan can come from any of these sources and needs to be a lender you feel comfortable with and them with you. Many times these land loans are nicknamed "Story Loans" as each situation has it's own story as to the improvements and plans on a particular property. The mortgage rep will want to know that story and feel comfortable enough with it and you to allow the loan to go to underwriting.

Some new land loan programs do allow for a zero down loan but certain restrictions apply. If you have owned land before but are currently renting or maybe you are a first time land buyer considering a large plot for farming or building your dream home there may be perfect programs in place for you.

We want to provide you with all the necessary information on buying land with zero down on the Columbia River. We have many lots for sale in Chelan Valley for your dream home or recreation spot. Give us a call to get in touch with a lender or to view some of these great homes. Original post here:http://beeberanch.net/can-i-buy-land-for-zero-down_303.html