Why would someone take out
a land construction loan?
A land construction 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. Even if you need
a commercial loan with bad credit, Coastal Coastal La Jolla Funding may be able to structure a business construction
loan
For our construction hard loan money,
CLJF normally lends up to 50% of the land value. Land
construction 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 Land construction
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.
Land construction loan Repayment:
Our construction building 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
construction 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 construction loan purpose and security
coverage.
If you would like to apply for a business construction
loan through the Coastal Coastal La Jolla Funding, click on our
Land construction loan application. |
