You’ve driven past that perfect piece of land near Swan Park more times than you can count. Maybe it’s a lot off Broadway Street, a wooded parcel near Bertram Chain of Lakes, or open ground outside Becker or Princeton that keeps calling your name. Land loans and custom homes aren’t just for developers or people with deep pockets. They’re for everyday families in Central Minnesota who want to build something that’s truly theirs.
Sherburne State Bank has been helping people do exactly that for over 100 years.
What Is a Land Loan, Exactly?
A land loan is financing you use to purchase a lot or parcel of land before you build. It’s separate from your construction financing, though the two often work together. If you find a buildable lot you like, a lot purchase loan lets you secure that land now so it’s waiting when you’re ready to build.
Without financing lined up first, that lot you’ve had your eye on could easily sell to someone else. Having a lender in your corner early changes everything.
How Construction Financing Works
Once you own your land, construction financing covers the cost of actually building your custom home. This type of loan typically releases funds in stages as your build progresses, which helps you and your custom home builder stay on budget and on schedule.
It’s a little different from a standard mortgage, and that’s where working with a local lender really matters. A big national bank won’t know that land values near Pebble Creek Golf Club or the Summit Pointe area have their own unique characteristics. A local lender does.
You can learn more about how construction loans work by having a conversation with your local lender.
What Are the Land Loan Requirements?
Most lenders look at your credit score, down payment, and what you plan to do with the land. Raw land typically requires a larger down payment than improved lots with utilities already in place. If you’re buying in an area where some parcels are already prepped for building, your loan terms may look a little different than purchasing raw acreage.
Our team of loan specialists can walk you through the process, tell you what to expect, and help get your loan started. Knowing the land loan requirements ahead of time saves you from surprises at closing.
Build on Your Land, Your Way
One of the best parts of choosing to build on your land is the freedom it gives you. You pick the floor plan, the finishes, the orientation of the home on the lot, and much more.
Let’s Talk About Your Lot
Whether you’re just starting to look or you already have a parcel picked out, talking to a lender early gives you a real advantage.
Call or stop by to talk through your land loan and construction financing options today.
Monticello Bank
1200 State Highway 25 S.
Monticello, MN 55362
Phone: 763-271-7177
Princeton Bank
136 North Rum River Drive
Princeton, MN 55371
Phone: 763-389-4099
Becker Bank
12500 Sherburne Avenue P.O. Box 428
Becker, MN 55308
Phone: 763-261-4200
MEMBER FDIC | EQUAL HOUSING LENDER
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