What is a land loan?
It is a loan that is used to finance the purchase of a lot that a borrower will eventually build on. They may be called many different names. To name a few, land purchase loans, raw land loans, residential lot loans, land mortgage loans, vacant land loans, or land and construction loans. The money loaned to the borrower is simply used to allow the land to be purchased before the construction of a home begins.
Size and type of land loans offer
Our land loans are for the purpose of residential construction up to 10 acres.
Benefits of a Macatawa Bank land loan
- 5/1 ARM option available
- No escrow account required
- Local, personalized service
- Local decisions
- Fast approvals and competitively priced rates
- Finance up to 80% of the property value
Tips before buying land
- Make sure the location fits your lifestyle. Is the neighborhood a good fit?
- Insist on a warranty deed and title insurance to make sure you have a clear title to the property.
- Check with utility services (sewer, electric, etc) to ensure they will be available and what the costs will be.
- Get a staked survey of the property and be aware of all easements and accesses.
- Double check property conditions in various weather conditions.
- Research restrictions and site limitations to ensure you can build the home the way you want.
- The interest expense on a land loan may be tax deductible if the land is held as an investment. Consult with your tax advisor.
- Check to see if the property is located in a flood zone that may require flood insurance.