California Land Loan Definition:
California land loans are any loans
that are made against existing mortgages of land within
the state of California. A California land loan can
be used for building residential or commercial units
within California.
Why would someone take out
a land loan?
A California land loan would be used to buy land or
settle loans used in buying land or use part of the
loan for other non-housing purposes.
For our California land loans, CLJF
normally lends up to 50% of the land value. Land
loans can be considered start-up loans that are usually
used to start-up construction. We can loan on raw land
but as the process goes, the next step is entitlements
and permits and then the construction begins. Usually
construction begins after all the land is entitled and
all permits are secured. As construction begins the
value of the land increases and now the developer can
qualify for a larger loan based on approximately 70%
of the value. Usually the value of a California land
loan is based on the"as is value" and then the sell
off value which is used in case the borrower defaults
and the investor wants to cash in the land. The security
for the loan is always the value of the land and that
means the investor will hold the note or 1st trust deed
to the land. There are certain situations where we can
secure 2nd trust deeds, again based on loan to value.
Calfornia Land Loan Repayment:
Our California loan loan repayments normally run up
to 20 years, but if you are below the age of 30 years
you can go up to a 25 year term; keeping the monthly
payment really low. Interest rates on our standard land
loan products is variable and individual loans are quoted
either at a discount or premium to our base lending
rate. The discounts and premiums primarily depend on
land loan purpose and security coverage.
If you would like to apply for a land loan through Coastal
La Jolla Funding, click on our California
land loan application.
For more information on land and construction
loans, simply click on our Land
and Construction Loan page. |
