Lot Loans

A lot loan is a way to finance the purchase of a tract or plot of land. It's similar to a mortgage, except the loan isn't secured by a house. Both lot loans and land loans refer to the same thing, so the terms are often used interchangeably.

No. Getting a land loan doesn't have to be hard. However, because land loans are riskier for the lender than a traditional mortgage, the borrowing requirements may be different. For example, interest rates are usually higher for land loans, and you may need to provide a higher down payment.

No. Although it's very common, building a house isn't required to get a lot loan. There are many other reasons why people choose to buy land. For example, a homeowner might purchase neighboring lots to increase their acreage and expand their homestead. Others might want to purchase land they can use specially for hunting, fishing, camping or gardening.

Terms for lot loans can vary. Common terms include 60 months and 120 months (with a 60-month balloon). The longest term we offer is 180 months with a 60-month balloon.

Yes. In fact, residential lot and land loans are typically refinanced once you get further along in the construction process. They're often replaced with a home construction loan—or a mortgage when construction is completed. Refinancing this way can help you get a lower interest rate on your principal balance.

There are many contributing factors that determine how much land you can afford. First, there's the land itself to consider: its location, its quality, whether it's developed or undeveloped, and how you plan to use it. Next, consider your financial situation as a borrower. Reviewing the 5 Cs of credit can help you see how your application might look to a lender. Finally, there's no substitute for expert guidance. Talk to one of our lending experts to learn more about your options and how much you may be qualified to borrow.