Are you considering buying land to build a house in beautiful northern Minnesota? Whether you’re eyeing property in Cloquet, Moose Lake, Floodwood, or the greater Duluth area, understanding how to finance your dream can make the process easier. This guide will walk you through everything you need to know about land financing and how to get started.
What Is Land Financing?
Land financing is the process of securing a loan specifically for purchasing a plot of land. It’s similar to a mortgage for a home. If you’re planning to build a home on the land, additional financing options exist, such as construction loans.
Contact Your Local Home Loan TeamTypes of Land Loans
When financing land, the type of loan you’ll need depends on the property and your plans.
- Raw Land or Improved Land Loan: Our land program gives you the flexibility to buy undeveloped land or improved land that already has utilities such as electric, or water.
- Construction Loan: You can use this loan to buy land and begin building right away. Make sure to note this loan requires 20% down.
Steps to Finance Land and Build Your Home
- Determine Your Budget:
- Consider the land cost, construction, and additional expenses like permits and site preparation.
- Find the Right Property:
- Look for land that fits your needs, whether it’s in Cloquet, Moose Lake, or Floodwood. Even if it’s in Duluth, or elsewhere, we can help finance*.
- Confirm zoning and land-use regulations in the area.
- Work with Local Experts:
- Consult with a real estate agent familiar with northern Minnesota properties.
- Contact our local team now to explore your financing options.
- Understand Loan Requirements:
- A down payment for a land loan can be as low as 10%.
- Be prepared to provide detailed plans for your land use, including construction timelines.
- Apply for the Loan:
- Gather necessary documents, including proof of income, asset statement, and property details.
- You can start the process online in a matter of seconds with our team.
- Consider Additional Costs:
- Land surveys (Optional at NCU), site inspections, and utility hookups can add to your overall expenses.
Why Choose Northwoods Credit Union for Your Land Loan in Minnesota?
At Northwoods CU, we specialize in helping our community members achieve their dreams of homeownership or landownership. With branch locations in Cloquet, Moose Lake, and Floodwood, our local expertise and tailored loan options make us the perfect partner for your land financing needs. We proudly serve northern Minnesota and its surrounding communities and counties.
FAQs About Land Financing
Q: Can I use a land loan to buy property and build immediately?
Yes. There are a few loan options you can use for this purpose. Explore them now.
Q: What’s the difference between a land loan and a traditional mortgage?
Land loans focus solely on the land itself, while traditional mortgages include a home. Land loans typically require higher down payments and shorter terms.
Q: Do I need a down payment for a land loan?
Yes, most land loans require a down payment of as low as 10%, depending on the property and loan type.
Q: Can I finance undeveloped land?
Yes you can! Did you know that we will finance hunting land, too? It does not just have to be for building. Explore options with us now.
*Not all applicants will qualify. Membership eligibility required. NCU is insured by NCUA. Equal Housing Opportunity Lender.