Given Bank Of Uganda’s order to all commercial banks to value real estate at 75% of the going rate after the COVID 19 pandemic opportunities to fully finance your land purchase are quite slim, though there are some options you could utilize to get 100% payment of your dream land and they include;
Seller Financing
This can be a good option for getting favorable terms, especially if the seller is eager to unload the land and the market is cool. Since this is an agreement between two private citizens, everything is negotiable, from the down payment to the interest rate. It is important to have the papers reviewed before signing anything to avoid loopholes and unpleasant surprises for either party.
Local Banks and Credit Unions
Local banks and credit unions typically look more favorably on land loans than the big behemoths do. They also may offer better terms due to their local knowledge of the property. All the same, a potential borrower will need to present a loan package with specs and plans for the land, as well as personal financial information to prove creditworthiness.
Family Loan
How can buyers purchase land if the banks and credit unions do not offer to finance it? If the property is for family use you could lobby family members to contribute and help finance the acquisition of land. This offers an assortment of subsidized loans with minimal requirements and advantageous terms.
Home Equity Loan
A buyer with existing property and little debt may want to consider a home equity loan. This type of loan taps the equity of the existing property, granting much better terms than any regular construction or land loan.
The Bottom Line
Financing a property on which to build your dream home is much more complex than applying for a mortgage. Lenders require surveyed boundaries, and you’ll need to check zoning and land-use restrictions, as well as access to utilities and public roads. The more improved the land, the lower your required down payment and borrowing costs will be.