I wonder if someone can clarify this, I was told by someone trying to buy a couple of acres that the banks won't lend to him because they won't/can't use the land as security also they won't use land anymore as security for other loans - the banks and the broker both told him this - is this correct? Given that our next purchase was likely to be land what are the facts?
Thanks
Hi, you are able to get loans using land as security. There is probably additional circumstances that haven't been mentioned to you. Some banks (e.g. CBA) will lend for the purchase of land. However a number of banks will only lend for a land and construction package. Each bank also has a different lending policy based on the location (e.g. Category 1 - metro or Category 2 - regional) and zoning classifications (residential, rural, commercial etc). It's probably a combination of factors that has stopped your friend getting the loan for the land he's interested in.