The two kinds of loans are similar in the basic structure of loans, but land equity loans are different in several aspects. For example, the part of land you own can be mortgaged as collateral even though the land itself still has some debts. The feature of land equity loans is that they are more difficult to obtain, but their interest rate will be lower.

Find land equity loan

Most lenders engaged in loan mortgage business have some standard practices, such as the closing procedures of housing evaluation and the registration of lien, but it is very difficult to find land loans, because they can not make a procedural estimation of land loans, it is difficult to price real estate, or even have no experience to cancel the redemption right of land debts, and they do not know how to calculate the cost, So this means that in case of default, it is difficult to figure out the situation, and the lender will bear higher risks, while the shrewd lender will not put himself in such a high risk, so this is why it is very difficult to find apprentice equity loans.

Interest rate of land equity loan

Generally speaking, the interest rate of land equity loans is lower than that of housing equity loans. First of all, the two types of people are different. Take the housing equity borrowers as an example. Because ordinary people's houses are not only impressive, they usually have many other types of loans, such as car loans, under the name of housing loans, and they rarely can pay for a flat in full, so they often bear huge debts when they own their own houses, but the borrowers of land equity loans are different, Because they do not have so much debt to pay, the average debt for land purchase is lower than the average debt for property purchase, which means that their total debt to total assets ratio is low, which will lead to lower interest rates for their loans, which means that land owners can pay off their debts more quickly.

You can use land rights to build houses

In addition, we learned from the meeting that we can't check the kitchen by purchasing a real estate loan, because the kitchen is a loan collateral, and no institution can clearly give the value of the house according to a standardized procedure. But if you purchase land rights, it is different, because you can use this loan for the construction of your house, in a sense, This means that you can assess the value of your house, but generally speaking, this loan is not enough to cover the total cost of building the house, but it can at least enable you to get a fund in a short period of time. At the same time, you can also mortgage your house permanently.

Use land equity loans to pay debts

We know that when you buy land, you may need a sum of money to pay for it, such as the construction of water pipes, drainage systems, etc., The advantage of land loans is that they can combine these costs with land loans. You can make a single loan easier to manage before or after the completion of the project, And the interest rate will be relatively lower, which means that the total cost we need to pay will be lower than the total cost of paying each single debt separately. No matter when the total cost is low, it is beneficial. Since we may also apply for other types of loans, such as housing loans or car loans, it is a very wise choice to minimize the amount of debt you have.

（Writer：Seli）