Acquiring a loan for vacant land involves some caution from lenders due to the risks tied to land purchase. 

Land values can be volatile, changing more swiftly than home prices. If a borrower fails to repay the land loan, selling vacant land is tougher than selling an established home. 

Given these factors, the maximum loan-to-value ratio (LVR) for a vacant land loan with bad credit is restricted. 

Loan Amount Considerations: 

• The maximum LVR you can borrow is 80% of the property value, contingent on factors like land size and location. 
• For land up to 10.1 hectares, borrowing up to 80% of the land value is common. Larger land sizes may have a restricted LVR of 70%. 
• Certain postcodes may have restrictions, which can be verified using our postcode calculator. 

Accepted Bad Credit Scenarios: 

• Some major banks overlook minor defaults under $1,000 for standard vacant land loans. 
• One lender accepts one-month mortgage arrears. 
• Non-conforming lenders consider registered defaults, judgments, writs, or write-offs under specified amounts for different purposes. 
• Specialist lenders may consider an unlimited number of defaults, whether paid or unpaid, after a 24-month period. 
• Options are available for those with a one-day discharged bankruptcy. 

Building on Vacant Land and Timing: 

• Vacant land provides an option if you lack immediate funds to build but wish to secure the lot. 
• Building immediately isn’t mandatory, but delayed plans may be considered higher risk. Intentions to build reduce perceived risk. 

Interest Rates and Income Verification: 

• Interest rates for vacant land loans with bad credit are typically higher, especially with non-conforming lenders. 
• Rates might vary for investment land loans compared to residential land loans. 
• Income verification for PAYG and self-employed applicants is required, with supporting documents like payslips, tax returns, and bank statements. 

Low Doc Options: 

• Low doc options are available for purchasing vacant land with bad credit. 
• Approval for low doc with bad credit may be case-specific, with a reduced max LVR. 

Loan Amount Limits: 

• The maximum and minimum amounts you can borrow vary based on factors like land size and location, reaching up to $2.5 million. 
• Minimum loan amounts for bad credit vacant land loans typically range between $50,000 and $100,000. 

Enhancing Loan Approval Chances: 

• Improve your credit score. 
• Close unused credit cards to boost borrowing power. 
• Increase your deposit, as the LVR is capped at 80%. 
• Prioritize paying off new debts on your credit file to demonstrate commitment to improving your credit score. 

Frequently Asked Questions (FAQs): 

• Loan terms for vacant land loans usually extend up to 30 years, with one lender offering a 40-year term. 
• Lenders consider factors like road access, proximity to amenities, zoning, and intended land use (residential, commercial, farming).