The terms "lot" and "land" may be quite similar, but in the realm of construction, there are huge dissimilarities. First of all, all lots can be considered land but not all pieces of land can be considered lots. And here are the definitions:
The lot is a property ready for building a house. It usually is provided with all the utilities, including water, sewer, gas, electricity, telephone, etc. However, if they are not on the site, they're not so far away.
The land is a property without habitable structures. A raw land is a term that defines a piece of property that is not yet ready for building.
The best choice for you is to buy a lot. It is much cheaper and it helps you obtain a construction loan a lot easier. A raw land also requires additional expenses in order to make the piece of land become habitable, and the extra costs are very high. It also implies spending a lot of time and energy.
All these factors influence the lender's decision when analyzing your loan score. And there are many chances that you would not get the desired loan because of the raw land.
In case of raw pieces of land, the banks consider the risks as being higher and fewer banks offer a loan in such cases. A piece of raw land is also less marketable than a finished lot and therefore, fewer buyers are eager to invest their time, money and effort in such a property.