Sunday, January 23, 2011

Help!! I need to know ,can you get a loan on just land(no house) even if you owe $12,000?

I'm saying I own land I owe $12,000 on it, but I want to see if the bank can loan me money using my land as collateral, I live in Texas.


Unless it is worth FAR more then that the answer is no, land is not good collateral. There are a couple of problems for the bank with it, assuming they foreclose on you (which they always assume can happen).

A - land is hard to sell. Very limited amount of possible buyers.

B - land does NOT depreciate. This means if they have it they can't use it as a tax deduction.

At least houses they can write off as a business loss, which is why it is not that big a deal if they sit unsold for awhile. Not being able to do that they have truly given their money away if you default on the loan.

basically you need to sell your soul... someone will do it but you'll pay a hefty price

You have to own outright to use as collateral because your debtor (who you are paying note to) is the first lienholder in case you default.

How can you say you own land if you owe $12,000???

Try www.creditbud.com

They give loans to people with bad credit.

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