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The Home Edition

Monthly Newsletter for the Members and Real Estate Partners of MTC Federal Credit Union

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The Dirt on Land Loans

Not every financial institution provides land loans. Because of this, borrowers will find that it is harder to get the type of financing they need to build the home of their dreams. Whether you are considering a subdivision lot or land in the country … MTC Federal has the dirt on Land Loans.

Fixed rates available up to 15 Years.

15% down with the remaining 85% financed.

  • Land must be unimproved. Raw land lacks sewers, streets, structures, etc.
  • Land cannot be landlocked. It must have direct road access.
  • Land must not be used for commercial purposes such as business farming or subdividing.
  • Land will require a survey if not already on record.

Land Equity for New Construction Down Payment:

If you are planning to build a home, you may find the land before you are ready to start construction.  When this is the case, a Land Loan is a great option.  The advantage to buying the land before you build is that you can begin earning equity.  The amount paid toward the land loan and increases in property value can be considered wealth.  This value may be used for a down payment when the time comes to apply for a construction or end loan.

FOR EXAMPLE:  Here is the equity you could earn if you purchase 4 acres of land for $40,000. 

15% Down Payment: $6,000

Principal Payments for 2 Years: $3,000

Property Value Increases from $40,000-$45,000: $5,000

TOTAL EQUITY to Apply Toward Mortgage: $14,000

$14,000 can make a big difference, if you apply it toward the mortgage.  It can eliminate the PMI requirement.  It may earn you a better interest rate.  It can allow you to qualify for more home.

If you’re ready to move dirt, get started below or give an MTC Federal Mortgage Expert a call at 800/442-7792.

©2019 MTC Federal Credit Union. All rights reserved. Federally insured by the NCUA. Equal Housing Lender. Annual Percentage Rate (APR) may vary depending on each individual’s credit history and underwriting factors. All loans subject to credit union approval. All credit union loan programs, rates, terms and conditions are subject to change at any time and without notice. Offer may end at any time. Other restrictions may apply.