Land Contract’s 101

Easy financing, makes it possible for anyone to purchase land for sale from Gratia Group.  The land sales team at Gratia Group will help you locate the perfect home lot or investment land for sale with the ideal payment, location and pricing to meet your particular needs.  Although we make the land buying process easier, there are many important things for land buyers to know, especially about a land sales contract.  Here are the definitions of some general land contract terms to help guide you through the land buying process:

PRINCIPAL:  The original amount of a debt on which interest is calculated.

Principal Payment:  sometimes called an “extra” payment; this is a payment that goes only towards reducing the loan’s principal balance.  Making payments towards the principal in addition to your regular monthly payment reduces the amount of interest paid over time.  When you make principal payments, your total loan will be paid off quicker.

Principal Balance:  The amount of the original debt that is still owed.  Not to be confused with Payoff Balance.

INTEREST:  The price paid for borrowing money. Interest is calculated as a percentage of the principal balance.

PAYOFF BALANCE:  The amount required to pay off a loan.  The payoff balance is the remaining principal balance plus any interest accrued since the last payment.  This includes accrued late fees, if there are any. The payoff balance will change daily.

GRACE PERIOD:  The window of time after your payment is due that you can still make your payment and not be charged a late fee.  For example if your payment is due on the 1st of each month, and you have a 10 day grace period, you will not be charged a late fee as long as you pay by the 10th of each month.

IMPOUNDS:  Money collected for the payment of the land that is not part of the loan.  Property taxes are an example of impounds.

While finding a good plot of land for sale is important, knowing and understanding the terms of you land sales contract is vital.  Contact a member of the Gratia Group team at (239) 333-2221 for all your land sales contract needs and land purchase requests.

 

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