1st Florida Lending Corp., a registered Mortgage Lender
Orlando servicing only the State of Florida, offering over
48 loans programs including Conventional Loans, Non-
Conforming Loans, FHA Loans, VA Loans, USDA Loan,
Self-Employed Loans, Bank Statement Loans, No-Doc
Loans, Reverse Mortgage Loans, ITIN Loans, Rental
Investment Loans, to name a few and specializing in
Bank Statement Loans or “stated loans” requiring no Tax
Return verification and much more. * No broker or
lender fees are for FHA,VA, USDA and Conventional
loan types
Main Office: 2151 Consulate Dr. * Suite 8 * Orlando,
FL., 32837 * Telephone * (800)856-7097 * (800) 655-
1345 * (407) 300-2558 * Fax (877) 401-9955
* Disclaimer: All Loan programs, rates and terms can
change without notice and are subject to credit and
underwriting approval. Loan charts highlight min/max
constraints, assumptions & random scenarios only. We will
always work hard to approve your loan but there are no
guarantees of any kind expressed or implied that any loan
we be approved. Licensed in Florida Only. When Banks
Say No ! We Say YES ! ® is a registered trademark owned
by 1st Florida Lending Corp. Florida lender license #
MLD106.
© 2007 - 2023 1st Florida Lending Corp. - All rights reserved
A vacant land loan is a
specialized type of loan used to
finance the purchase of
undeveloped land or a vacant lot.
Unlike a mortgage loan, which is
intended for buying a home, a
land loan is specifically designed
for acquiring raw land.
Let's delve into some key points
about land loans:
1. **Purpose:** Vacant lot loans serve
various purposes, such as purchasing
land for building a home, starting a farm,
or investing in real estate.
2. **Interest Rates:** Vacant lot loans
often come with higher interest rates
compared to traditional mortgage loans.
Underwriters perceive land loans as
riskier due to the potential lack of
income generation and the volatility of
land value.
3. **Down Payment:** Vacant lot loans
require a larger down payment, typically
up to 35%, compared to traditional
mortgage loans. The down payment
represents a percentage of the land's
purchase price and serves as the
borrower's initial equity in the property.
4. **Loan Terms:** Land loans may have
shorter terms than mortgage loans. The
repayment period can vary, but it is not
uncommon for land loans to have terms
ranging from 5 to 30 years.
5. **Land Development:** If the
borrower intends to develop the land, we
offer construction-to-permanent loans for
primary and second homes. For
commercial or investment properties, we
provide ground-up construction loans.
6. **Zoning and Land Use Restrictions:**
Underwriters consider the zoning and
land use restrictions in the area where
the land is located. Certain restrictions
may impact the loan approval process.
It is crucial for borrowers to thoroughly
review the terms and conditions of a
land loan and be aware of any potential
restrictions or requirements associated
with it. Additionally, underwriters may
have specific criteria regarding the type
of land they are willing to finance.
How Do Land Loans Work?
Obtaining a land or vacant lot loan is
similar to obtaining a mortgage loan for
a home.
However, determining the value of the
land can be more challenging since
there is no property collateral involved.
This makes land loans a riskier
transaction for underwriters, resulting in
higher down payments and interest
rates compared to typical home loans. In
this article, we will delve into the process
of buying land to build a house.
Loan Qualifications (Check with
your Loan Officer)
Each land loan type has specific
qualifications that borrowers must meet.
However, there are general
requirements that all borrowers must
fulfill when applying for a land loan:
1.
Have an excellent credit score of
660 or higher.
2.
Minimum Loan Amount $150,000
Required Documents:
•
Last two years full tax returns
•
Last two years of W2s
•
Pay stubs from last 30 days
•
Bank Statement from last two
months
•
Copy of ID.
Once underwriting takes these factors
into consideration, the rates and
obligations of the land loan can be
determined. Land loan interest rates are
typically higher than mortgage interest
rates due to the increased risk.
However, borrowers with better credit
scores and low debt-to-income ratios
(DTI) may qualify for lower rates.
Lending Process
Once the loan rates and terms are
determined and the borrower is
approved, they must make a down
payment and repay the loan in
installments based on the agreed
interest rate.
Refinancing a Construction Loan
If you decide to take advantage of any of
our construction loan programs, once
the construction of your new house is
complete, you can refinance your land
loan into a traditional mortgage.
Refinancing also allows you to secure a
new principal balance and a lower
interest rate. To refinance a traditional
loan with 1st Florida Lending,
construction must be fully completed,
and you must obtain a Certificate of
Occupancy.
By following these guidelines and
understanding the land loan process,
you can navigate the complexities of
purchasing land to build your dream
home. At 1st Florida Lending, we are
here to assist you every step of the way.