Toronto Land Loan & Land Financing Options

“Do You Need a Toronto Land Loan For a Bare Land or Developed Property?”

A Toronto land loan can potentially be acquired via a institutional or private mortgage lending source, depending on the property and the credit profile of the borrower.

Bare land loans are typically financed at a level no greater than 50% of the current market value. In some cases, if a property is very near to being developed or built on, the loan to value can increase to a level of 60%.

Location plays a large role in getting a mortgage lender interested in providing a land loan. If the property is within an existing developed area, or directly adjacent to one, then its likely going to be easier to secure commercial mortgage financing for the site. For bare land sites that are more remote, the general interest in the property may be much lower if mortgage lenders feel that there isn’t going to be much of an active market for the property in the coming year when the mortgage term would be in place.

A Toronto land loan in the form of an institutional mortgage can see rates as low as prime plus 3% which is going to be higher than the mortgage financing on developed real estate property, but still considerably lower than what you would have to be paying a private mortgage lender.

In cases where bare land is held for future development or speculation, mortgage financing can be an excellent source of capital to utilize for other purposes. And as the value of the land increases, so is the potential amount of funding that can be mortgaged against it.

Toronto bare land can also be used as secondary security for a loan facility on another piece of real estate where there is insufficient equity available to secure the initial mortgage request.

Bare land mortgages are also commonly used as security for bridge loans where the loan to value might be significantly lower than 50%, allowing the mortgage to be put into place quickly as the lending risk would be much lower on a security value under 50%.

If you need a Toronto land loan for any of the mentioned applications or some other purpose, give me a call so I can quickly assess your requirements and provide relevant land loan financing options for your immediate consideration.

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About the Author Joe Walsh

I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel