How to Finance a Land Purchase

There are many reasons why most people buy empty lots or land. You may opt to build a commercial building or home. Another reason is that you want to buy the land for the sole purpose of investing and selling it within a matter of years. However, regardless of what your reasons may be, acquiring a loan in order to finance a purchase of land is quite tricky.

Thus, it will be best for you to familiarize yourself with regards to the process that takes place in it before you go to the bank.

This task of financing a land purchase is not that hard but it is also not that easy. The things that you are going to need in this task are loan, realtor, down payment, and inspection. Here are the specific ways on how to finance a land purchase which may be very helpful for you.

Bank Dealings

The very first way of financing a land purchase is for you to determine or decide you main goals with concern to the land purchase that you are going to undertake. Bear in mind that before any bank decide in getting involve with land purchase financing, they will first want to know and examine your plans. Thus, they may conduct an inspection or have an interview with you. This is because you might decide on building your dream home, business, or rental units on a lot which is empty and deserted. This is the most common mistake that many individuals commit. So be very wary before you decide.

Expect Higher Interest Rates

Moving on, the second thing that you must do or rather expect is that you are going to pay an interest rate higher than what you are aiming for. The main reason for this is that several of the lenders nowadays perceive land purchases to be very risky and chancy business. This is of no surprise since you are most likely to demand or need additional loan in order for you to finance the real construction project. This will ordinarily result to the lenders charging interest rates which are higher than what you have expected for your loan.

Proper Location

Furthermore, the next step is for you to select the appropriate and correct location site. If your plans include constructing commercial building or home, you must conduct a research. Keep in mind that building on an empty lot will be costly because you are going to need the services of the professionals with regards to running the telephone, electrical, water, as well as the septic lines. Once done with the selection of location, you will have to conduct your own inspection with the land. Before you go asking any bank to have your land purchase finance, you will have to talk with an inspector or realtor. Then that will be the time where you will determine whether or not the land that you have chosen can support and sustain a building or a home.


  • Pummy said on December 17, 2010
    Which legitimate financing agency in India can provide 400 to 500 Crores loan to buy agriculture land in India with low rate of interest. I am only interested to deal with LEGITIMATE financers PLEASE. In lieu of loan, land can be mortgaged. With the above fund, we wish to buy huge piece of land with most modern facilities like, gold, stuff farm, advanced dairy, and mega size mineral water plant. We have too much of water in the land on 24/7 basis. Please revert and advise the most direct and non complicated method. Expected revenue per year is about 100 Crore per year. Best regards. Pummy
  • Nisha Somayya said on May 22, 2011
    we are looking at buying nearly 5-12 acres price ranging 50 lakhs-70 lakhs of coffee plantation to pursue organic farming, the income from same will range from 4 lakhs - 10 lakhs p.a currently and once it is organic certified income levels will be higher. looking at legitimate bank finance. Regards, Nisha
  • vasanth said on December 20, 2013
    Good Morning sir. I am Vasanth Bermade m/s VASUSHYAM VENTURES Mangalore. Our new project going on at kuloor kavoor road mangalore. 1 acre land with 112 flats we already sold 42 flats for central govt employs again 20 flats esquire from NMPT employs. Land cost is 7cr But we register for 7cr. Already I paid 4cr to Land owner in agreement. Now i require 3cr for land registration and 3cr for development.If you are required other land for security i provide you converted 1.30acre land at padvu nanthur Govet value 1.80L per cent. After the registration land that document also we are giving to you. Further information call me or give me a appointment I reach your office. Thank you Vasanth Bermade 9880312438


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