Recreational Land Loans

Owning a getaway property built on land near the mountains or the sea is a dream come true for many. However, the brave find the means to make these dreams come true. One of the ways to own a recreational land is to apply for recreational land loans.

However, before you jump for joy at the prospect of being able to take out a loan and invest in undeveloped land, you should realize that lending for such real estate is not easy. Interest rates are also not as attractive as mortgage or refinance loans. The reason is that it is quite difficult to assess the value of land compared to a house. Now, evaluating the land is complicated because it can suffer from soil, drainage or other problems.

Another major problem in obtaining recreational land loans is that there is no loan company that can buy these loans from people or companies that make loans and are no longer equipped to hold onto them. However, with that said, you still have options for getting a RV loan if you’re willing to put down a 10% or 20% down payment. There are some banks that will be happy to finance you, but the problem is that they will give the loan only for land belonging to their neighboring areas. To buy land outside the banks’ neighborhoods, you will be required to pay at least 50%! However, if you are really desperate and don’t mind paying 12% interest on the loan amount, you might be in luck as there are land finance companies that can finance your need.

So there is no other way to buy recreational land? One of the best ways to do this is to open your pocket and pay cash for the land deal. If you don’t have that kind of money, use home equity or refinance (cash). There are recreational land loan specialists who can help you get a better deal from financial institutions. In fact, your seller can also help arrange financing for you. Some land companies refer their buyers to local banks in the vicinity of their developments for loans to purchase land. If you’re lucky, you can get an ARM for a duration of 30 years at an interest rate of 5.5%. So look around you, try to negotiate before making a decision.

On the other hand, if you’re not buying land directly from a developer, nor can you invest the equity in your home, visit your local banks for loan programs. If you are sure that the value of the property is increasing, you can easily obtain loans for recreational land. As land prices rise, banks are willing to provide loans at a lower interest rate. Who knows, you might be lucky enough with one of them.

Another good thing to remember when buying undeveloped land is that it will be counted as an investment if you have plans to build a home in the future. The loan will not be considered a mortgage loan.