MIND YOUR BIZNESS
Using Land in Lieu of
A Mortgage Down Payment
Sponsored Ad Content from
Vanderbilt Mortgage and Finance, Inc.
Saving up for a new home can take many people years and to most it can seem like there is no easy answer to achieving their dream. According to the U.S Census Bureau as of July 2018, just 64% of Americans currently own their home. The hurdle that stands in the way of homeownership for the remaining: saving up for the down payment. The great news is, there are other easy options to help you open the door to your new home faster. Many lenders will allow land - either owned or given as a gift - to be used as collateral instead of a cash down payment when obtaining financing to purchase a new home.
Basics of Land in Lieu
Land equity is valuable but does not work the same as cash. It can potentially be used to secure home purchase financing but will not lower your actual loan amount like a cash down payment. The amount of land equity needed will depend on the borrower's credit worthiness, which is determined by a lender's criteria. Depending on the purchase price of the home and the value of the land being used as an alternative to a down payment, little to no additional cash could be required to obtain financing. The lender will hold a lien on