Investment in land can be fruitful when you know how to make the most of it.
Whether you are planning to purchase land for agricultural purposes or if you wish to use it for commercial purposes, remember that your decisions here will play a significant role in the profit or loss you will experience in the future.
But before you can move on to that, you will require a loan to complete the deal financially. Luckily, many financing options are available for investors in the industry.
However, have you wondered what will happen if you have bad credit? Keep away all the tension aside, as there are Land Loans for Bad Credit as well.
The guide here will provide you with precise insights about it all.
Is it possible to get a land loan with bad credit?
Anyone wishing to apply for a land loan will require a substantial down payment or a good credit score to secure the loan.
This lowers the chances of land loan approval for buyers with a bad credit score. However, this does not mean it is impossible.
Low credit score holders can significantly improve their credit score to get approved for a land loan. It would be best to stay alert of scammers claiming to bring you a land loan, even with a bad credit score. The best bet here is to boost your credit score and meet the lender’s expectations when applying for a loan.
No doubt, the criteria for qualifying for a land loan can be pretty high, but it is worth the effort as the value of the land keeps fluctuating. So, purchasing land when you find it affordable will help you continue with your dream project in the future.
Why is it hard to get a land loan with bad credit?
In comparison to mortgage process loans or construction loans, land loans are more challenging. This is simply because the loan lenders consider the location of the land for financing the land purchase.
Further, there are different land loan types, so it can significantly influence the approval process. It will vary based on how developed the location is and the type of land loan you are looking for.
Remember that the land market value and the estimated future value of the location can influence the loan approval possibilities. As these factors are uncertain, the lenders are pushed to raise the eligibility criteria for land loans.
So, it is essential that the borrower has a credit score of 720 and higher and can bring in a reasonable upfront down payment.
Simple ways to get a land loan
If you are looking for land loans with bad credit, you have received enough information on how important credit score is for getting approval. So here, let’s check out some tips to help you overcome destructive credit issues and get a loan approval.
Try other loan options
Luckily, many loan options are available, even for people with bad credit. The eligibility criteria there will be simple, and you will be able to secure it.
However, here comes many challenges, especially of higher interest rates. If you are wondering about the other loan options, consider seller financing, wherein you can depend on the owners from whom you buy the land. They will offer you financing even with a low credit score.
Further, you can also get help from someone with a good credit score. Getting a co-signer will significantly improve your chances of getting approval for the loan. Also, you must know that government land loan programs provide the required financing to the borrowers even with bad credit.
Be ready with a reasonable down payment
There are a lot of land loan lenders who will be ready to give you the approval for the land loan, even with bad credit. But it will come with a higher interest rate and a large upfront down payment.
Trust a good credit repair agency
There are undoubtedly many alternative options you can consider to get land loans, but you can boost your credit score and get the loan by rescoring. A good credit score can help you greatly in every financial step.
Many credit repair agencies will educate you on the necessity of a good credit score and guide you through the credit repair process. If you don’t have enough time to fix the errors in your report, you can trust the experts to guide you in the right direction.
Best Land Loans for Bad Credit
So, if you are starting the search for Land Loans for Bad Credit, here are the top options to get the financing.
24/7 Lending Group
They are one of the leading lenders for land loans. They are always ready to match subprime borrowers with suitable lenders in their network.
The best part about the platform is that it will pre-qualify you for a personal loan within minutes and recommend one or more direct lenders without even checking your credit or impacting your credit score.
Using the platform, you can borrow up to $35,000. But remember that if you have a bad credit score, the amount will be reduced.
Irrespective of the loan size, you can arrange the funding to purchase the land as soon as the next business day.
PersonalLoans.com
The platform works great with an extensive network of direct lenders specializing in subprime loans. Here, a poor credit score will not necessarily prevent you from getting a loan but will influence the amount you can earn as a loan.
The platform provides easy access to lenders, a hassle-free experience, and charges nothing for the services. So, the borrowers here have no obligation to borrow, and great features make the borrowing process easy.
Local credit unions
You must know that local credit unions are similar to the banks as they offer subprime personal loans. The reason is that credit union customers are also the owners; therefore, they try to accommodate the borrowers at every step.
Most unions restrict who can join based on the applicant’s work experience. But some, like PenFed credit union, openly enroll anyone who can put $5 into a savings account.
Rocket Mortgage
The platform is well known for providing equity loans to those with a median FICO score of 680 or even better. Here, you can get loan sizes of 75%, 85%, and 90% of equity, depending on your credit score.
The lender’s minimum equity loan value will be $45,000, while the maximum is $350000. It offers 10 to 20-year fixed terms for the loans. However, your debt-to-income ratio must be at most 45% if you qualify.
Quicken Loans
They are a part of Rocket Mortgage. This means the policy of rocket mortgage is similar here.
Once you receive equity loan approval, you can collect the proceeds in one lump sum payment. At the same time, you get to repay the loan with a fixed interest rate over a specified period.
The lenders here are cautious to ensure you can afford the monthly payments as you must assume additional debt and foreclosure risk.
Keep in mind funding from here can take about 2 to 4 weeks. So, it would help if you planned things accordingly.
USDA rural housing loans
The US Department of Agriculture also offers two types of rural housing site loans for nonprofit organizations. They provide loans to purchase and develop the land for housing low and moderate-income families.
Here, the government defines low income as between 50% to 80% of the area. The 2 of the most popular programs here include section 523 loans and section 524 loans.
401K loans
Getting the financing from yourself is the safest and the cheapest alternative you can find to finance the land purchase. You can borrow from your 401K if you have one and the plan allows it.
The maximum loan amount one can get here is $50,000, or half the account balance. In this case, you must repay the loan with interest within five years. However, you can take up to 15 years to repay the loan or use the property to start a winery, including purchasing the land.
Conclusion
Finding Land Loans for Bad Credit can be pretty tough. If you are facing difficulty, consider trusting Private Capital Investors. They have got the best option available to them.
They will research and find private money lenders that are ready to provide great financing options that fit your requirements well. Be it agricultural land loans or farm loans, they are prepared to offer it all.
