Communication between you and your lender is important throughout the land buying process. To move your land loan application forward, your lender is going to need information about the land you want to purchase, the type of loan you desire and a few key financial documents, including your current assets and liabilities.
Here’s a helpful checklist of what you may need to complete your land loan application.
Land and Loan Type
One of the first things your lender will want to know is whether your application is for a new land purchase or to refinance an existing loan. In either case, your lender will ask you to share some basic details about the property, such as:
- Where is the land located?
- What is the property’s legal description?
- How many tillable acres does it include?
- What is your projected cash flow as a result of the transaction?
- Have you rented this tract of land before or will it generate new income?
- What will the land be used for?
- When do you expect to make the purchase?
- What is the anticipated purchase price?
- Are any land improvements needed? If so, what are the estimated costs?
- Are you planning to put down a cash payment or use another form of collateral?
- What loan amount are you asking for?
If you are refinancing an existing land loan, your lender likely will ask some additional questions:
- Is this a refinance of operating or term debt?
- Is this request to refinance delinquent payments?
Once your lender understands the purpose of the loan, he or she will need more information about you and your current financial situation. Some of the key information and documents you may need to prepare include:
- Legal names and contact information for all applicants and co-applicants.
- Driver’s license for each liable person.
- Past three years federal income tax returns (include 1040 and associated schedules, personal and business if applicable).
- Financial statement or balance sheet listing total assets and liabilities (include personal and business if applicable).
- Signed authorization for release of information.
- Legal entity information for any trusts, partnerships or corporations that will be an applicant or pledging collateral. This includes articles of incorporation, bylaws and taxpayer identification number (TIN).
Submitting Your Loan Application
You are ready to apply for your land loan! After submitting your loan request, a credit analyst will review your loan package to determine if the request is approved.
Unless additional information is required, you can expect a credit decision for full loan approval within 7 to 10 days. Of course, getting pre-approval early in the land buying process is a great way to know what you can afford. Using our simple online application, you can apply for pre-approval when it’s convenient for you and receive a response within three business hours.
Keep in mind that if any specifics of your loan application change, your lender will need to re-evaluate the approval to reflect the new details.