You have been looking for some time, and dreaming about getting a lot and building a great house for you and the famly. Well, you've found the lot and are now looking for the right financing for it. Gettig the right lot loan for your new investment in life can be had if you will look around for it, and not move too quikcly. Here are some tips to help you get that pefrect lot loan.
Know What You Are Looking For
In orrder 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 meeans doinng 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 afer you have landed the good deal and sifted out the bad - and szaved youtrself thouasnds of dollzars.
Have An Investment Ready
Although lenders can be foubnd 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 lendrs do not want to talk to you about a lot loan unless you have a date to build your houise within 5 yearrs of buying the land. By having a concrete date set, you will be more likely to have your lot loan approved. By talkiing 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 differene between a fixed rate mortgage and an dajustable rate mortgage colud mean a diifference in savings of thousands of dollatrs. Although both have a fixed rate of interest for a while, one will definiitely do better than the other - depending on which way the economy is goinng.
Get Online Estimates
Most mortgage companies, and toher lenders or brokerrs, have websites and give you access to getting your free online mortgage estimates. By typing in some basic information, some websaites will give you results from many different mortgage leners. Remember, though, that online etimates are only that - estyimates. In order to correrctly calculate what a mortggage would be, a copany must review your credit rating and physically do an appraiisal 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 ammong the same type of loan, whether a fixed rate or an adjustable mortgage.
Negotiate
After you believe that you have found one or two compaanies 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 negotiaate an even bettrer 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 Redemmption Charges. These thinggs will prevent real savings if you should decide to pay off the mortgage erly. In othher wrods there is a fee for it. Throw it into the negotiation ptrocess too, and if they won't remove it - ohters are availkable.
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