Raw Land Financing
“The best investment on Earth is earth.” – Louis Glickman
It is often best to build from the ground up in real estate.
If you are purchasing a plot of land in a subdivision to build a home you may need financing to perform your project. As well as that, the purchase of raw land can range from the purchase of 50 acres located in a bush in northern Ontario to the purchase of a smaller plot of land downtown to develop a strip mall. Financing depends on the type of raw land purchased.
The common starting point is purchasing the land.
Many large developers will purchase the land with their cash reserves. The developers then finance the construction after obtaining a construction mortgage. More often than not, the land purchase itself will require financing to purchase. This can be obtained by utilizing a raw land mortgage.
Raw land mortgages are similar to a standard residential or commercial mortgage. A charge is registered on the PIN of the property often with additional security involved. However, given the nature of land as a non-income-generating asset, lending parameters decrease from what you would expect compared to a standard residential mortgage.
Always chat with a licensed Mortgage Broker/Agent before entering into a purchase of raw land. They can make sure you go over all the plans, and help you save time and money. Book a meeting here today.
