There are lots of different reasons why people might want to purchase a piece of land and, as you may expect, land can be just as expensive as property to purchase - if not more so. When purchasing land, many still require a mortgage and this is the only way they would be able to afford the piece of land they’re interested in. This is especially true if they are interested in building a property on the land as this is another expense to take into consideration.
Thankfully, it is possible to get a mortgage when you’re purchasing land. There are actually lots of different land mortgages available, from self-build mortgages and commercial development mortgages to agricultural mortgages, and depending on your plans for the vacant piece of land, one mortgage is often more suitable than the others.
Just like a standard residential mortgage, you are essentially borrowing the money from a mortgage provider when taking out a mortgage on a piece of land and it is crucial that you keep up with your mortgage repayments.
There are a couple of other options available to anyone needing financial assistance to purchase land too, including; development finance and bridging finance, and they are worth exploring in more detail. Things such as whether you already have planning permission for the land would influence whether one of these options is better suited to you than a traditional mortgage.
Applying for a land mortgage is incredibly similar to applying for a residential mortgage. Many of the same checks are involved and you are still required to provide information about your current circumstances to a mortgage provider. They then determine how much of a risk you’re perceived to be before providing you with a mortgage offer.
Some find that obtaining a land mortgage is more difficult than getting a residential mortgage though as the market is much more specialised. Generally speaking, you would require more of a deposit when applying for a land mortgage too and instead of the 10% that is considered ‘normal’ for a residential mortgage, you often need at least a 30% deposit and Loan To Value Ratios of 70% aren’t uncommon when purchasing land.
Finding a land mortgage with good interest rates could also be quite difficult and these rates are usually higher than residential mortgages. Factors like; the type of land you’re purchasing, where it is located, your intended use for the land and also your credit score all affect interest rates. You may find that there are additional terms and conditions to take into consideration when choosing which land mortgage is more suitable for you as well.
To prevent any hassle when you’re trying to get a land mortgage, it is advantageous to enlist the help of a mortgage advisor. Not only can they provide you with mortgage advice, but they will also help you to make well-informed decisions about your mortgage offers.
When you’re wanting to find out more about getting a mortgage for land, be sure to contact our team at Mortgage Required. Our mortgage advisors in Maidenhead can help you to navigate the myriad of mortgage lenders and mortgage products available on the market, and ensure that you’re opting for the best and most competitive option for your specific needs. When you use our mortgage services, all we need is a short consultation to collate some important information, we can then use this to interrogate the market and find the most attractive deals.
Our team of specialists will always have your best interests in mind and you can turn to us in confidence knowing that we pride ourselves on delivering first-class customer service. We know that property and land are two of the most expensive assets people will own, and we can help you to make the right decisions about your mortgage.
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