Ontario land loan financing options are available for many different types of real estate property and financing applications.
Real estate is a preferred asset to finance due to the permanence and stability of the security, so if a piece of land has an established market value and their is an active resale market for the property, then there is a good chance that an Ontario land loan can be arranged.
Location and condition will also play a significant role in the interest a given piece of property is going to attract from mortgage lenders that provide land financing commitments. The more remote and undeveloped the property, the less interest there is likely to be in providing a land loan.
But even if the property is bare land where no development has ever taken place, if the location is strategic in terms of near term future development, then the property is still likely to garner interest from property mortgage lenders.
For bare land mortgages, the basic starting point for financing is that both interested institutional and private mortgage lenders will consider financing 50% of the fair market value of the property. For a higher loan to value amount to be secured, the property is going to have to be closer to a residential or commercial use where additional property value or income can be realized.
For an institutional or bank land loan in Ontario, the borrower is going to have to demonstrate strong repayment ability towards the debt servicing requirements. Private mortgage lenders will still be interested in debt service, but because their mortgage terms tend to be no more than one year on average, proof of debt servicing is less of an issue, especially when only 50% of the property value is being financed via mortgage.
Financing rates for private mortgages provided for Ontario land loans are going to be higher than institutional rates, but they will also have much lower financing criteria to meet that what you will require to cover off with a bank.
If you require an Ontario land loan, I recommend that you give me a call so I can quickly go over your requirements and provider you with relevant land financing options for your immediate review and consideration.