Most banks and mortgage company don't loan money for raw land. They never feel that the land is collateral enough to secure the the loan. Land values are usually more volatile than home values. You might want to rethink taking out a second mortgage on your home.
I know pretty much through out the whole Northeast you can't get a bank loan on land unless it's a commercial property and you have a development plan - and even then it's tough.
Some banks might consider a loan on land if you have a large sum of money on deposit (once again some form of collateral). With credit tightening and few old timer around who can remember the S&L scandel of the 80's ( pacels of undeveloped land was boundered back forth between banks at inflated prices to create "assets" that only existed on paper) your chances of getting a loan are slim.
Why can't the owner of the property hold a mortgage on the land? Let's say 125k down, the balance at 10% interest for ten years? Or 125k down, the balance at 10% interest on a 30 year sehedule with a ballon payment at the end of five years?
your local bank will give you the best deal on this...they keep there loans in their profiles and with it being local they will be able to see value in what you are buying compared to a company across the states
Are you looking to later develop the property as owner occupied or is it commercial?
If it is owner occupied-You might consider looking into a 1x close construction/permanent loan that would allow you to include that cost of the land and begin building with a loan based on the appraised value of the project when complete.
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If it is a commercial deal - Most banks will not touch a raw land deal- But as a broker I have access to a few lenders who would look at it. But I would need some additional information to be sure that the 25% down would be enough to qualify.
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