Are you considering purchasing land to build a dream home where you can enjoy the countryside and grow your own garden? Before you start searching for available properties, the first thing you need to do is evaluate your current financial situation. That’s why Land Resellers would like to provide you with the following money-saving tips to purchase land.
Understand Your Finances
Take the time to organize all your bills and assets to know where you stand financially. There are plenty of online downloadable worksheets to help you compile your assets, bank account, stocks, savings, etc. There will also be an area to list any debts you have like car payments, rent or mortgage, credit cards, etc. Knowing where you stand and having a good debt-to-income ratio will help you start planning for your land purchase.
Important Questions To Ask Yourself
Once you know where your finances stand, it’s important to ask yourself some essential questions. Can you pay for land in cash? If you have the money put away, that’s great! However, you should determine if you really want to deplete all your savings or if it would be better to take out a loan for all or a portion of your land purchase. Sometimes, paying in cash isn’t always the right decision if it leaves you without any emergency funds.
What’s Your Credit Score?
If you're considering getting a land loan, it’s important to check your credit score with national credit bureaus like Equifax, Experian, and TransUnion. While a credit score of 700 is considered average, excellent credit usually applies to those with a 800 or higher score. Having a low credit score can affect whether you will be approved for a loan, interest rates, and how much you qualify for. Knowing your credit score is also a good idea before approaching different lenders. This will provide you with additional time to improve your credit by paying off any reported debts that could prevent you from purchasing land.
Eliminate Any Debts You Owe
Once you have a good idea of your credit score, it’s important to eliminate any debts that may hold you back from getting a loan. Start by looking at your annual credit report and determine what debts you can begin to pay off one at a time. A good rule of thumb is to pay off any high-interest debts first. However, if you don’t have that kind of cash lying around, start by paying off any small balances that you can quickly eliminate from your credit report.
Determine A Down Payment
Once you know your credit score and whether you can obtain a loan, it’s important to determine how much of a down payment you will need to purchase land. Start by researching how much land is going for in the area you want to purchase and use a calculator to determine your monthly payment. Depending on the lender, many credit unions and national lenders provide these useful tools online, free of charge. Typically, a land loan requires a 15 to 20 percent down payment. Keep in mind that the more money you put down, the more attractive you will be to lenders, and the lower your interest rate and monthly payments will be.
Saving Up For A Down Payment
Once you know where you stand financially, you’ll need to start saving for a down payment. Don’t be discouraged if it takes you a few years to put away the funds you’ll need. After all, land is a substantial purchase. Want to speed up your savings? Take the time to figure out what you can sacrifice to reach for the future. Depending on your current lifestyle, this could mean eliminating daily fast food purchases, yearly vacations, and selling current assets to boost your savings account. While it may not seem ideal, small sacrifices like these can save you thousands of dollars each year.
Start A Separate Savings Account
When it comes to additional money-saving tips, start an entirely separate savings account from the rest of your money. This will make it less tempting to spend it on non-essential purchases. Watching your savings account grow with every deposit will encourage you along the way to making your dream of owning land a reality.
Land Resellers
Buying land doesn’t have to be complicated. It just takes a little research and a good understanding of the best ways to purchase it. At Land Resellers, we help potential buyers find the property of their dreams in different parts of the country that match your unique criteria and budget. With detail-rich listings, you can view important information like land type, location, acreage, price, and other specifications. Check us out today to search for the most beautiful raw and undeveloped land, sprawling ranches, and custom home sites in the nation.