Newmarket land loans can be acquired for properties ranging from totally bare land that has never been developed to properties that require further development prior to building construction.
Because real estate financing is preferred over all other types of debt financing, both banks and private mortgage lenders are interested in providing land loans in Newmarket and the surrounding area.
The basis for a land loan starts with the property location, present use, and current market value. At the low end of the spectrum, bare land in a fairly remote location is going to provide a loan or mortgage no greater than 50% of the current fair market value of the property. A bare land loan can be used to develop the property or for a completely unrelated use. If the acquired funds are invested in further development of the property, any gain in fair market value from the planned work can result in a higher initial land mortgage being granted to the borrower.
For semi developed properties or developed real estate, the loan to property value that can be extended by a lender can reach as high as 85%. Higher lending ratios are going to require 1) a strong and active resale market; 2) proof of historical cash flow for debt service, and 3) a solid exit strategy for repayment of the loan principal over time.
Bank or institutional land financing programs are going to be very focused on all three of these components while private mortgage lenders will be most concerned with the current fair value of the property and the exit strategy for repayment.
Newmarket land financing will be easier to acquire and at lower rates if the real estate is located adjacent to an ongoing area of development. This will increase the likelihood that the property will not only appreciate in value over time, but will be able to be sold in a fairly predictable time frame for a fairly predictable price. When funds are required in a hurry, a private mortgage option is likely going to be preferred over a conventional mortgage program.
if you need Newmarket land financing for land acquisition or property development, I suggest that you give me a call so I can quickly assess your requirements and provide land loan and land mortgage financing options for your immediate consideration.