Is a land loan different to a construction loan?
Yes, there are some differences between land loans and construction loans.
Construction loans can be used to either build on a piece of land you already own, or to undertake major renovations on your property. The loan is released in progress payments depending on the stage of your build, so there are also specific timeframes that your build has to meet. Construction usually has to be completed within 12 months.
Land loans allow you to purchase a piece of land, and don't require that you build on it straight away. This means you are able to wait for a while before beginning construction on the land.
There are also differences in the way interest rates are calculated. For example, our land loans have the option of a fixed or variable interest rate, whereas our construction loans only use a variable rate.
Land and construction loans can be combined, if you wanted to purchase land and immediately build on it.