Question 1

Are land loan rates higher than mortgage rates?

Accepted Answer

Yes. Vacant land is riskier collateral for lenders, so rates and down payments are typically higher than for a home purchase. Expect rates 1–3% above prevailing mortgage rates.

Question 2

How much down payment does a land loan require?

Accepted Answer

Raw land loans commonly require 20–50% down; improved lots (with utilities, access, permits) can go lower. Seller financing often allows more flexible terms.

Question 3

How long are land loan terms?

Accepted Answer

Land loan terms are usually shorter than home mortgages — often 5 to 20 years, sometimes with a balloon.

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