Websites such as LendingUniverse allow users to get quotes from thousands of lenders with just one loan application and provide the most convenient way to compare lot loans. Prospective borrowers can also compare lot loans at the websites of lenders such as Frost Bank, Zions Bank and Union Bank & Trust.
Lot loans are generally more difficult to acquire than mortgages for already built houses, notes Steve Sanders for LotNetwork.com. This is because financial institutions regard lending against undeveloped lots as highly risky. That wariness is not unfounded; borrowers are more likely to default on loans acquired against undeveloped property. For that reason, a substantial majority of financial institutions do not offer lot loans, and those that do have stringent loan qualification requirements.
Getting loans for large undeveloped lots is particularly challenging, warns Sanders. Lot loans have maturity periods that are several months to a few years. Combined with the typically higher interest rates, this results in substantially higher monthly payments. The approval process is also usually longer and more stringent. Lenders tend to demand a larger down payment for lot loans and generally charge more fees. Prospective borrowers should consider the impact of these fees when comparing lot loans.