Key Terms
- Land loans are a great way to build a home in expensive areas.
- Sometimes called lot loans, these loans allow borrowers to secure a lot in popular or expensive areas.
- You can also find land loans for recreational or business purposes.
With one of the most stunning landscapes in the world and a wealth of unique towns and cities, it’s no wonder so many love to live in New Mexico. There’s plenty of room for everyone, too— according to the U.S. Census Bureau, New Mexico has a whopping 121,313 square miles of land.
Even with all that space, it’s becoming harder for residents of New Mexico to find ideal homes. Prices are going up, especially in popular towns such as Santa Fe and Albuquerque and with new and modern homes. Some turn to older homes or renovations as a more affordable option, but that can wind up costing you more in the end with renovations. The good news is that purchased land may serve as collateral for an eventual New Mexico construction loan.
With a New Mexico land loan, you can take a creative approach, nailing down the lot size and location you want and then building when the time is right. With the value per acre of land in New Mexico at an affordable $1931.02, per the New Estimates of Value of Land of the United States, you may find that buying acreage and then building in time is a much more manageable prospect, especially for vacation homes.
The pros and cons of a land loan in New Mexico
One of the primary reasons for the rapid rise in New Mexico property prices is that demand frequently outstrips supply in popular locations. This implies that not only is it more difficult to save for a home that is becoming increasingly costly, but when you are ready to buy, you may not be able to acquire the home you want in the neighborhood you want.
Because most people don’t think about land and lot loans, and they’re all fighting for the same inventory, you may avoid bidding wars and rejected bids, secure your lot, and plan for the next step.
Owning an empty lot also means that you won’t have to pay property insurance, and your property taxes will be cheap until you build your dream home. So you may use that money toward your building ideas.
Another significant advantage is that unoccupied land is usually less expensive than dwellings, so you may hunt for property in locations where you wish to live while still affording to buy your lot.
What are the drawbacks of this approach? Interest rates on land loans may be higher than traditional home loans. Lenders may also want greater down payments than mortgage loans, but with prices per acre so low, you may discover that money down on a land loan is not that frightening.
4 Best New Mexico land loan lenders
Some lenders only offer land loans for residential projects, while other programs can lend to those that are pursuing recreational or agri-business purchases.
1. Guadalupe Credit Union
A member-owned financial institution since 1948, Guadalupe Credit Union was established by parishioners of Our Lady of Guadalupe Church in Santa Fe. Over time, membership expanded to include anyone in Santa Fe County. This credit union offers vacant land loans, including personal loans, home equity loans and refinance offers in nearby counties.
We reached out to Guadalupe Credit Union to discuss land loan process, which you can read about below:
- Property must be located in Santa Fe, San Miguel, Río Arriba, Bernalillo, Sandoval, Torrance, Taos, Mora, or Colfax counties.
- Up to 75% financing available.
- Loan will not be sold
When you’re ready to connect with a loan officer, use our form to quickly match with land and lot loan programs based on your specific circumstances.
2. WaFd Bank
Based out of Washington state WaFd Bank serves areas of Idaho, Washington, Nevada, and New Mexico, meeting all of their banking needs. WaFd Bank offers a number of products to help its customers secure homes and property through lot loans and land loans.
We asked WaFd Bank for more details on their vacant land loan product and here is what they said:
- Land and lot loans available in Nevada only
- Land loans available even if construction is not imminent
- Improved land loans available up to $700,000
- 20-year term lot loan available for long-term plans.
When you’re ready to connect with a loan officer, use our form to quickly match with land and lot loan programs based on your specific circumstances.
3. Land Loan Specialists
Providing services to New Mexico, Texas, Colorado, and Montana, Land Loan Specialists, provide loan loans for 30 acres or more for farming, ranching, and other investment needs such as hunting and fishing property development. It strives to offer competitive rates like fixed rates for up to 30 years.
We contacted Land Loan Specialists to discuss their land loan product, and here is what we found:
- Farm loans available
- Variable rate options available
- Several fixed rate loan options, including 30 year fixed loan terms
- Loan amount available for 30 acres or more of land
- Local lenders available
When you’re ready to connect with a loan officer, use our form to quickly match with land and lot loan programs based on your specific circumstances.
4. Mountain America Credit Union
Opening in the 1930s, Mountain America Credit Union started serving the people of Utah by providing a number of banking services to help meet their customers’’ needs. Mountain America Credit Union offers a number of products to help customers meet their goals, including line of credit loans and lot loans and land loans.
We reached out to Mountain America Credit Union to discuss land loan details, which you can read about below:
- Available for land purchases whether you plan to immediately build or want to build at a later date
- Construction loans available
- Up to 85% financing on approved credit
- Fully amortizing fixed-rate and balloon options
- Easy online application process
When you’re ready to connect with a loan officer, use our form to quickly match with land and lot loan programs based on your specific circumstances.
Does a New Mexico home land loan make sense for you?
If the New Mexico real estate market is too competitive for you and you can’t manage to save enough money to buy a home, a land or lot loan is a terrific option.
Similarly, if none of the homes in your price range suit you and your needs, you may choose the option of designing and creating precisely what you want from the ground up. New Mexico land loans are also excellent options for people wishing to construct second homes or holiday houses that they do not need to move into right away.
Take a minute to assess the whole cost once you’ve decided to construct. It might be the case that starting with a land loan and building on your own may be doable and affordable.
Looking for a land or lot loan in a different state?
If you want to find the best land and lot loans in other states, click on your state below.
Joshua Holt is a licensed mortgage loan originator (NMLS #2306824) and founder of Biglaw Investor. His mortgage expertise lies in the areas of professional mortgage loans, particularly for lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.
