Posted on: 08th Dec, 2007 11:22 am
Hi,
I recently bought land (5 acres) in Henry County, Georgia. I own the land, and am currently building a home on it.
I need a personal loan, and would like to use my land as collateral (since I have a credit score of only 630). I would like a loan of at least $20,000.
Any advice of help would be greatly appreciated.
Thanks.
marshak
I recently bought land (5 acres) in Henry County, Georgia. I own the land, and am currently building a home on it.
I need a personal loan, and would like to use my land as collateral (since I have a credit score of only 630). I would like a loan of at least $20,000.
Any advice of help would be greatly appreciated.
Thanks.
marshak
How much is the land worth?
YOu can expect to get up to 50% of what the land is worth as the maximum loan amount.
YOu can expect to get up to 50% of what the land is worth as the maximum loan amount.
Hi Marshak,
Like Chris sais, unless you bought the property outright, or put at least 60% down when you bought it (depending on the total value), then this is probably not a viable option. Once the home is built, a home equity line might be an option, but in today's financial climate, the guidelines for seconds and heloc's is tightening up, dramatically ,or disappearing alltogether with some lenders.
If you have a longstanding relationship with your bank, I would start their and request a personal line of credit...which is like a credit card, in that there is no collateral.
You could look at an advance on one of your credit cards...none of these are great options, b/c the interest rate will be high. If you plan to pay it off when you roll your contruction loan so that it will be a short term debt, then these are not horrible options.
Last, but not least, be sure that taking on this new debt will not affect your qualifying ability on your new home. Everytime you increase your debt , it could tip the scale to a point that might make you difficult to be approved. In today's climate of tightening guidelines, it is wise to plan your moves carefully.
Kim
Like Chris sais, unless you bought the property outright, or put at least 60% down when you bought it (depending on the total value), then this is probably not a viable option. Once the home is built, a home equity line might be an option, but in today's financial climate, the guidelines for seconds and heloc's is tightening up, dramatically ,or disappearing alltogether with some lenders.
If you have a longstanding relationship with your bank, I would start their and request a personal line of credit...which is like a credit card, in that there is no collateral.
You could look at an advance on one of your credit cards...none of these are great options, b/c the interest rate will be high. If you plan to pay it off when you roll your contruction loan so that it will be a short term debt, then these are not horrible options.
Last, but not least, be sure that taking on this new debt will not affect your qualifying ability on your new home. Everytime you increase your debt , it could tip the scale to a point that might make you difficult to be approved. In today's climate of tightening guidelines, it is wise to plan your moves carefully.
Kim
Oops! Wasn't logged in, that was me above...
Kim
Kim
Hi all,
Thanks for replying.
I bought the land outright for $70,000. I have the title.
I only need a loan of $20,000. Would you happen to know of lenders that could help?
Thanks!
marshak
Thanks for replying.
I bought the land outright for $70,000. I have the title.
I only need a loan of $20,000. Would you happen to know of lenders that could help?
Thanks!
marshak
Hi Marshak,
Welcome to our forums.
It's good to know that you're building a home of your own. But if a personal loan is what you require, there's no way you can use the land as the collateral. If at all, you use the land as the collateral, then it has to be a land loan. Or else, you can go for a construction loan keeping the land and the improvements as the collateral. After the construction period, the loan is often converted into a permanent mortgage.
If you are looking for a lender to help you out with a construction or land loan, you may have a talk with some of our community lenders. The lenders in our community offer different types of loan program that suit borrowers having different financial situation and credit profiles. In case, you are interested, you may send us your request for mortgage quotes along with the minimum details.
As soon as we receive the request, we shall pass it on to our community lenders and they shall try to match their profiles with your loan requirement. And, if they can do so, they'll be able to provide you with the mortgage quotes. Thus, you can come to know how much you can qualify for and what are the possible loan programs you can go for.
Good luck
Welcome to our forums.
It's good to know that you're building a home of your own. But if a personal loan is what you require, there's no way you can use the land as the collateral. If at all, you use the land as the collateral, then it has to be a land loan. Or else, you can go for a construction loan keeping the land and the improvements as the collateral. After the construction period, the loan is often converted into a permanent mortgage.
If you are looking for a lender to help you out with a construction or land loan, you may have a talk with some of our community lenders. The lenders in our community offer different types of loan program that suit borrowers having different financial situation and credit profiles. In case, you are interested, you may send us your request for mortgage quotes along with the minimum details.
As soon as we receive the request, we shall pass it on to our community lenders and they shall try to match their profiles with your loan requirement. And, if they can do so, they'll be able to provide you with the mortgage quotes. Thus, you can come to know how much you can qualify for and what are the possible loan programs you can go for.
Good luck
Caron gives excellent advice. Be sure when contacting lenders you specifically speak with construction loan lenders who can go into more detail on how to use your land and "down payment". They can give you all the information you need.
If you need to apply for a bad credit loan, there are companies which dedicate themselves into helping people with bad credit. The most famous lenders are Credit Axis, Prosper and Lending Club. These companies are very good resources for finances because they try their best to offer their clients their lowest rates. However, since these companies are dealing with people who have bad credit, expect that their rates would be higher. If you do not wish to pay for a higher interest rate, I would suggest that you work on improving your credit score first so that getting approved would be more likely to happen. If you wish to learn more regarding your situation, visit http://www.badcredithistories.com/have-poor-credit-but-want-to-apply-for-a-loan/.
Hello! What I would do is ask a loan specialist in your state. Certain rules vary from state to state. I believe that you cannot take a personal loan out though and use your land as collateral. I believe that you have to have a land loan or a construction loan in order to use your land.