Kamloops Land Mortgage

If you can’t find the perfect house in Kamloops, you might have to build it yourself. To do this, you’ll need to buy land first. You could own the land for a while before starting to build your dream home, but what are the rules for buying land in Kamloops?

Down Payments

When you buy a house, you usually have to pay a certain amount upfront called a down payment. If you buy an existing, normal house, you might only need to pay 5% of the cost upfront. But if you want to buy a piece of land in Kamloops that has all the basic services like water, electricity, and sewer, you may need to pay 25-35% upfront.

If the land you want to buy doesn’t have all the services, it’s called partially-serviced, and the bank might make you pay more upfront to reduce the risk. The highest down payment you might have to pay is 50%, meaning if you’re buying a $100,000 piece of land, you’ll need to pay $50,000 upfront.

If you want to buy a larger piece of land, like 5 to 160 acres, it’s called an acreage loan. But since these types of properties are harder to sell, banks might make you pay 20-35% upfront. It also depends on if there’s a home on the land or if it’s just land and a damaged home.

Loan Structuring

If you want to buy land with a house or cabin on it, that would be covered by a regular home loan. But if you want to buy just the land, you’ll need a land loan. If you want to build something other than a house, like a barn or workshop, you’ll need a different loan for that.

When you’re ready to build your dream home, the first step is to pay off the land loan with a down payment of 25 to 35%. The lender will want to make sure the land is fully yours before giving you money to build on it. They may also offer a special advance to help with the down payment if you’re buying the land and building a home at the same time.

After you finish building your home in Kamloops, you can refinance the loan to get a better interest rate. Just keep in mind that a regular home loan won’t cover outbuildings like a barn or workshop, so you’ll need another loan for that. Both loans will depend on the risk of the property and your credit history.

The Additional Loan Requirements

 IWhen buying land to build a home, you may need to show that there is a clean source of water. This could mean getting a well drilled and having the water tested by a lab. But for an existing home, these things are usually not required, such as making sure the property has clear boundaries or access to public roads and water. Contact Jodi Smith with Whalen Mortgages Kamloops to get help with your land purchase in Kamloops.

Consult with a Kamloops mortgage broker so that you can find the cheapest land mortgage possible or apply online today.