The home is the main focus of a typical residential mortgage, and the land it is built on receives little consideration. A standard residential mortgage is just a loan secured by a property. But what if all you want to do is buy that land? You may desire to buy some property for various reasons, including your home construction plans or the operation of an agriculture-based business. That brings the question; can you get a mortgage for land? Here is what you need to know;
The Land Market Is More Specialised
When seeking a loan to purchase land, there are many of the same requirements as when applying for one to buy a typical home, and you must similarly reassure the lender that you are a low-risk investment for them. But because the land market is more specialised than the one for conventional residential loans, many regular lenders opt to steer clear of land finance completely.
Mortgages For Land Come In Various Forms
Unused residential land is hard to come by, and agricultural farmland frequently needs to be kept for that purpose. The type of land, your intended use, and the extent of any prior permission requests will significantly impact your mortgage. Finding an experienced mortgage advisor like the Right Mortgage UK can help you discover and explore your options.
The desire to construct their own home is the primary motivator for most first-time land buyers. A regular residential mortgage is unavailable without an existing property; instead, you must use the specialised self-build mortgage.
A self-build mortgage consists of a portion secured by the project’s planned property and a portion secured by the land. Unlike a conventional residential mortgage, the lender gives the money in phases: first, to build the land, then, in later stages, to give money to buy building supplies and pay for the work to be done.
Mortgages For Woodland
You may buy a piece of wood land in several locations in the UK. Although it is uncommon for this land to come with a change permit, it can be used as a private haven and a potential investment. Similar limits apply to agricultural mortgages as well as those for woodlands.
Mortgage For Agriculture
You can obtain a mortgage for an agricultural property as part of a commercial endeavour or as an investment in the future. Many people like owning a smallholding where they can work toward becoming self-sufficient, grow their food, and maintain animals. It can frequently be purchased individually or in addition to a residential property to expand an existing home.
Getting an agricultural mortgage will depend greatly on your plan for the land and whether you have the necessary planning approval to utilise the area as you desire, as is the case with all land mortgages.
Mortgage For Commercial Development
Businesses might be interested in buying land so they can develop it further. This could be for anything from a new neighbourhood of houses to a location for a store.
When seeking a land mortgage, you have to decide why you want to purchase the land and contact an experienced, specialised mortgage lender for land.
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