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Like the name suggests, these loans are used to finance a piece of land. Getting one of these mortgage products presents a different set of hurdles than when you are applying for a house mortgage.
Type #1
A raw land loan is for a piece of property that’s undeveloped with no roads, sewers or electricity. These can be difficult to get financing for so you’ll need to come up with a detailed plan on how you want to develop the parcel.
Keep in mind that the terms you’ll get on the loans for these types of properties might hinge on the intended use.
Type #2
The second type is an improved land loan in Toronto where the parcel that you want to buy has access to amenities like water, electricity and even existing roads. These are developed so they might be more expensive to buy. However interest rates to purchase this type is usually lower than on the other ones.
Type #3
Unimproved land is still in a raw state although some parts of it have been developed. It might have some amenities and utilities but not usually items like a natural gas meter, phone box or electric meter. Getting an unimproved land loan is similar to getting one for a more traditional mortgage.
Looking to build your business or a dream home? These land loans in Toronto can be the way to accomplish that goal. If you’ve got a commercial purpose in mind, these can help you capitalize on adjacent areas. These types of loans usually finance new construction projects, so you’ll need to factor in issues and complications.
