The opportunity to turn raw land into something more is an endeavor that many people are not willing to undertake. However, if you are interested in turning raw land into a business or home, then it is necessary to obtain a private mortgage and financing through a third party lender. Many banks and other financial lending institutions will not cover raw land because they are not interested in the leg work that is associated with this type of purchase. If you are ready to purchase raw land and in need of a private mortgage, there are a few things you should know.
Have a plan. Raw land is more difficult to sell than a plot that already has a home on it. Lenders want to know that you have a plan of action if you are interested in purchasing the land. Have a detailed plan put together discussing turning that raw land into a new home or into a business opportunity to present to your lender. This will greatly affect their decision on whether or not to finance your efforts.
Remember the additional costs. Purchasing the land with a private mortgage is only a fraction of the costs that you will endure. Most people choose to include various other costs of surveying, building, re-zoning and contracting the land into the cost of their mortgage. This allows you to have the funding necessary for each step in your process without having to go back for an additional loan.
Rural or non-conforming properties are the best choice for private mortgages. Each year millions of people purchase a home in a town or city around the country. There are also hundreds of people who purchase raw land to build homes or business growth in rural areas. A private mortgage is best suited for those individuals who are looking for this type of alternative project. For example, farmers should choose a private mortgage for raw land that they intend to use to expand their current ownership.
For more information or to discuss whether or not Private Mortgage is right for you please contact one of our professionals at 403.252.7882