Cash out Loans on Land
There are some credit unions and banks which write loans that are secured by a land. This is usually referred to as land or lot loans. In any circumstances that the borrower is in default, the moneylender then will assume the control of the former’s land.
Lot loans, in general, are categorized into two. First is the loans on raw land and the second is the loans for developed lot.
Developed Distinguished From Raw
Developed lots, as a whole, are characterized as having utility and road access. On the other hand, raw lands have neither the attributes present in the developed lots. In addition to this, loan terms and underwriting requirements extremely differ if it be based on financial institutions.
Process of Cash out Loans on Land
First stage in the process is finding the deed of the land that you want to you make use of as a collateral for the loan that you intend to apply. Then find your land survey. If in case you do not possess land survey, it will be advisable for you to hire a certified surveyor of your state in order to conduct one. With regards to the cost of the surveys, it will depend on the plot size. It will typically take one surveyor a couple of days before they can complete their survey after they have gone on visiting your plot land.
Once you are done with the land surveys, you can now contact credit unions and local banks. You can also inquire lenders involve in financial institutions in your locality if they are offering financing on lot loans. While at your conversation with the lenders, also inform them if what kind of land you possess, whether developed or raw. Remember also of informing them of the size of your plot. In connection with this, you must also convey to them how badly you need the money that they will let you borrow. Several of the financial institutions possess maximum as well as minimum dollar limits on loans. As a result, you will need to figure out if the loan that you intend to acquire meets each of the institution’s guidelines on underwriting. In addition to this, there are a couple of banks that limit land loans to 10 parcels of area or much lesser while there are other which allow loans on lot with an area of 40 acres.
After talking with the lenders, determine which of them offers you the best terms. Once you have decided which one to deal with, have a meeting along with the lender’s loan officer. Give the officer your survey, insurance and deed information as well as the two latest pay stubs. Expect also that the loan officer will examine your credit and then forward all your information to the department of underwriting. In general, approval on initial loan takes 48 hours or lesser than that. The officer will then arrange for your land appraisal.
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