land loan rates vs. home mortgage rates

Guest 0.10 Dollars($)

We took out a loan for $100K for land a few years ago. The loan has a 9% interest rate, which seems a little steep to me. I'm serious, credit cards have better interest rates. My car loan has a better interest rate. In the past two years, I have paid over $20K, but the principal has not dropped below $95K. The loan isn't up for renewal until 2011, but with all of the interest rate cuts in the past few months, I thought now might be a good time to refinance. Are the interest rates for land loans comparable to the rates for home mortgages?

larry · Joined: 27 Jun 2007 Posts: 3328 473.51 Dollars($)

Hi acker,

Welcome to the forum.

Interest rates on Land loans are a bit higher. But I think you may refinance the loan lesser than 9%. Shop a bit for lenders and see if anyone can offer you better rates and terms.

Best of luck,
Larry

chrisburns · Posted: Fri Mar 28, 2008 7:36 am Post subject:

A client of mine recently did a 25% LTV cash out refinance on his raw land in Texas. He was able to provide full documentation of his income and received a 25 year loan at 6.5% with no prepayment penalty.

Most people go to hard money lender which charge high rates and many points for land loans, however there are banks that will offer conforming pricing on land loans if you are a good borrower.

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