How To Get The Right Lot Loan

How To Get The Right Lot Loan

How to​ Get the​ Right Lot Loan
You have been looking for some time,​ and dreaming about getting a​ lot and building a​ great house for you​ and the​ family .​
Well,​ you've found the​ lot and are now looking for the​ right financing for it .​
Getting the​ right lot loan for your new investment in​ life can be had if​ you​ will look around for it,​ and not move too quickly .​
Here are some tips to​ help you​ get that perfect lot loan.
Know What you​ Are Looking For
In order to​ know a​ good deal when you​ see one,​ you​ are going to​ have to​ know a​ little about lot loans,​ and their terms .​
This means doing some old-fashioned homework .​
Now there is​ a​ word that you​ need to​ get used to​ - again .​
It will prove to​ be well worth it​ after you​ have landed the​ good deal and sifted out the​ bad - and saved yourself thousands of​ dollars.
Have An Investment Ready
Although lenders can be found that will give you​ a​ loan for up to​ about 90% of​ the​ price,​ you​ will get a​ better deal and interest rate if​ you​ can pay for at​ least 20% of​ the​ loan to​ value (LTV),​ but you​ do not want to​ pay more than 35% .​
Beyond these two extremes,​ you​ probably won't get a​ loan.
Establish a​ Date to​ Build Your House
Most lenders do not want to​ talk to​ you​ about a​ lot loan unless you​ have a​ date to​ build your house within 5 years of​ buying the​ land .​
By having a​ concrete date set,​ you​ will be more likely to​ have your lot loan approved .​
By talking to​ them about being able to​ convert the​ loan to​ a​ construction loan and then to​ a​ first mortgage,​ you​ will find many that would be glad to​ talk to​ you​ .​
Going this route can save you​ some money,​ too.
Determine the​ Best Kind of​ Loan
Knowing the​ difference between a​ fixed rate mortgage and an​ adjustable rate mortgage could mean a​ difference in​ savings of​ thousands of​ dollars .​
Although both have a​ fixed rate of​ interest for a​ while,​ one will definitely do better than the​ other - depending on​ which way the​ economy is​ going.
Get Online Estimates
Most mortgage companies,​ and other lenders or​ brokers,​ have websites and give you​ access to​ getting your free online mortgage estimates .​
By typing in​ some basic information,​ some websites will give you​ results from many different mortgage lenders .​
Remember,​ though,​ that online estimates are only that - estimates .​
In order to​ correctly calculate what a​ mortgage would be,​ a​ company must review your credit rating and physically do an​ appraisal of​ the​ property.
Break Down the​ Estimates
Try to​ break down the​ estimates you​ received into the​ base loan and the​ fees .​
Then compare each of​ these among the​ same type of​ loan,​ whether a​ fixed rate or​ an​ adjustable mortgage.
After you​ believe that you​ have found one or​ two companies that look good to​ you,​ you​ can check them out on​ the​ Internet and make sure that they are good companies .​
Then,​ talk to​ them and see if​ you​ can negotiate an​ even better deal than what was originally offered .​
a​ little hint - the​ fees are what you​ want to​ work on.
Finally,​ watch out for ERC's,​ or​ Early Redemption Charges .​
These things will prevent real savings if​ you​ should decide to​ pay off the​ mortgage early .​
In other words there is​ a​ fee for it .​
Throw it​ into the​ negotiation process too,​ and if​ they won't remove it​ - others are available.

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