A land loan is a type of financing designed specifically for purchasing a parcel of land. Unlike a traditional mortgage, which is tied to a home or structure, land loans are secured by the land itself. They can be used to purchase property with the intent to build a primary residence, vacation home, or for investment purposes.

There are generally three main types of land loans:

1. Raw Land Loans – For undeveloped property without utilities or improvements. These loans often require higher down payments and have stricter terms due to the risk involved.
2. Unimproved Land Loans – For parcels that may have some infrastructure, such as roads or utility access, but still need significant development.
3. Improved Land Loans – For lots with ready access to utilities and infrastructure, typically the easiest to finance.

Because land loans carry different risks than traditional home loans, lenders may require larger down payments, shorter terms, or higher interest rates. However, they can be a great way to secure property in a desirable location now, even if you plan to build in the future.

We guide our clients through the mortgage and land financing process. If you are considering a land purchase, I would be happy to walk you through the available options and help you choose the loan that best fits your goals.