Our land loan had similar interest to a mortgage, but was interest only with a balloon payment after 24 months. The bank's intent was to issue the loan and roll it into a construction loan with similar terms (which is what we did). This was all through a small local bank where the loan officer inspected the house himself prior to each construction draw.

The biggest challenge we had with the loans for land, construction and the eventual end-loan was "Why are you building a 1900 sq-ft house? You really shouldn't be building a house under 3k sq-ft."

I’d have called that a medium to large house with 3k being huge - what is typical? Looking where I live, we are typical for 1960s, and just over half the current average of 205 square metres. Guess my idea of large is actually small.

Of course! And it's even lower risk because you can't really mess up land the way you can a house.

The land loans I've seen are not very advantageous, high interest and short terms; where are you getting them from?