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I’m looking to buy a piece of land (Less than $ 15,000) to someday build my retirement home on. My real estate broker told me I couldn’t get a mortgage, but my bank (Wachovia) offers what is called a “Lot Loan”. Has anyone ever applied for one of these? Is the application process relatively painless compared to a home mortgage? I have one a mortgage, but not much equity yet)
The land I’m looking at is is rural land in NE Penna and it’s more than acre. some places aren’t as expensive as California or New York and there are lots of lots in Pa avaliable for less than $ 10k per acre.
I told the guy at the bank that I wouldn’t be building on it for many years and he didn’t have a problem with that. Only need 10% down plus closing costs – amortized over 25 yrs with 5 yr balloon where you can refinance for the unpd balance, but I expect to have it pd off in 5yrs
It’s definitely NOT a construction loan
Even though it’s called a Lot Loan, I am not looking in any town – it’s definitely country, rural land I’m looking at with no town bigger than 5000 for miles around, if even that populated

5 Thoughts on Any one ever gotten a “Lot Loan” for vacant land?
  1. Reply
    May 4, 2011 at 1:40 am

    I haven’t and have never even heard of one. Land is typically bought with cash. You can’t get a construction loan unless you hold a clear, and paid, title.

    Make sure it is zoned for housing, 15k is nothing, I would worry that something is wrong with the lot.

  2. Reply
    Cyrus Nguyen
    May 4, 2011 at 2:12 am

    First of all, how long do you think before you will start building on that peace of land?

  3. Reply
    May 4, 2011 at 2:34 am

    “Land is typically bought with cash”… that must be nice. I am not from the city, so we don’t have “lot” loans, but we do have land loans. I own about 500 acres, bought at different times. I took loans out for it, just like I would a house or car and made payments until I got it paid off. Thankfully it’s paid for. Shouldn’t be a problem.

  4. Reply
    May 4, 2011 at 2:52 am

    You still have to qualify mostly the same way, with income and assets etc… But if you’re dealing directly with them, perhaps it’s somewhat smoother.

    Lot loans are riskier than normal mortgages, since vacant lots aren’t as easy to sell if they take it over after a default. So rates are higher, credit must be solid, etc…

  5. Reply
    Joe D
    May 4, 2011 at 3:24 am

    people seeking land-only financing as the first step toward building that dream home use Lot Loans


    Reasonable down payment plans
    A variety of long term payment amortization options with a 5-year balloon
    Competitive pricing
    May be rolled into permanent financing when construction is complete

    When you are ready to build, Lot Loans are designed to simplify financing during the home building process.

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