How to Get a Home or Land Loan: Steps and Documentation
Applying for financing can feel like a big step, but a little preparation goes a long way. Whether you are buying a home, purchasing land or planning ahead for a future project, understanding the process upfront can help you move forward with confidence.
This guide outlines the key steps and commonly requested documents to prepare before applying for a home or land loan, so you know what to expect and how to get started.
Step 1: Start With a Conversation
Many buyers think the first step in financing is filling out an application. In practice, starting with a conversation often sets the stage for a smoother experience.
Talking with a loan officer early helps you understand how the financing process works, explore options that fit your goals and approach the next steps with clarity. These conversations help align expectations, surface helpful questions early and provide context before paperwork ever comes into play.
Starting with a conversation can help:
- Clarify your goals and timeline
- Provide guidance on how the process typically works
- Help you feel more confident about the steps ahead
Step 2: What to Know About Credit Before Applying
Credit is one of several factors considered during the financing process. Understanding how it fits into the picture can help you feel better prepared as you move forward.
Before applying, it is generally a good idea to:
- Avoid opening new credit accounts
- Avoid making large purchases
- Keep your financial situation as consistent as possible
If you have questions about credit or want to understand how it may factor into your financing options, a loan officer can help explain what to expect and talk through next steps.
Step 3: Documents to Gather Before You Apply for a Loan
Having documents ready ahead of time can help keep the application process moving smoothly. Commonly requested items may include the following, depending on your situation.
- Government issued photo ID
- Recent bank statements
- Income documentation
If You Are a W-2 Employee
- 1 month of most recent pay stubs
- Most recentW-2's
- Most recent tax return
If You Are Self-Employed
- Two years of personal tax returns and business tax returns if filed separately
- Current business balance sheet with the following liabilities included:
- Creditor name
- Payment amount
- Payment frequency
- Current balance
If You Are Using Other Assets
- Investment account statements if funds will be used toward a down payment
- Mortgage statements on existing property
- Documentation for assets being leveraged as part of your financing plan
A loan officer can help confirm which documents apply to your situation and answer questions as you prepare.
Step 4: Applying for a Home or Land Loan
Once you’re ready, the next step is submitting an application or pre-approval request. From there, the process typically includes:
- Reviewing your application and supporting documents
- Evaluating the property
- Ordering an appraisal and completing title work
- Final approval and closing
The overall process for raw land loans and home loans is very similar. In some scenarios, a split is involved to create a new parcel and time is needed for a survey to be completed before the appraisal and title can be completed. A loan officer will help guide you through these details along the way.
If you’d like to explore how different loan amounts or terms could affect monthly payments, you can use our mortgage calculator as a starting point.
Using Home Equity as Part of Your Financing Plan
In some cases, buyers explore home equity as part of their overall financing plan. This may include using a home equity loan or line of credit toward a down payment on land or another property.
This option depends on individual circumstances, and a loan officer can help explain how home equity may fit into your overall plan and what factors to consider.
Working With a Loan Officer
Preparing for financing is about understanding your options and feeling confident about the path forward. Each step builds on the next and having the right guidance can help you make informed decisions from the start.
A loan officer can help:
- Apply this information to your specific situation
- Answer questions as they come up
- Help you determine what next step makes sense for you
When you are ready, starting the conversation is a practical way to move forward.
