When you are intending to purchase land for your own use or any other purpose, you will find that there are different type of loans available, and each type will depend on whether the land is completely undeveloped, partially developed or fully developed.
The borrower needs to have an excellent credit score and will have to explain to the lender the intended use of the land. The lender will check clear title to the land, zoning, land use restrictions, access to utilities, and surveyed boundaries, and these will have to confirm to the use the land buying client is going to put the land to.
All these factors will be taken into account before the lender considers the loan, the interest rates that will apply, and the obligations that will apply to the loan. Land mortgage loan interest rates will be higher as such loans are considered more risky. Down payments for the land are also required to be made.