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Old 01-22-2009, 01:55 PM
 
Location: N. Ga
3,491 posts, read 3,040,406 times
Reputation: 1830

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We own some land in Florida. Appraised value 120K. We still owe about 40% on it.

We'd like to make some improvements which will cost us 50K. We will be putting 25K in cash down, and would like to borrow 25K more, and roll the two loans together. We are not doing the improvements to sell it, we are doing the improvements so that the land is more usable for us.

Our credit is immaculate, (over 800 last check) and we have several accounts at that bank.

I was told no loans for land only, and that I can't use my equity in my land for collateral. I explained, I didn't want to take out an equity line, and that I was putting the 50% down for the improvements. Still no go.

I'm sorry to be ranting, but exactly what did this bail-out do, if there isn't any money for the banks to loan? The lady at the bank also told me that the bank wouldn't even loan the money to purchase raw land anymore. Is this happening nationwide or just in FL?
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Old 01-22-2009, 02:06 PM
 
Location: Hernando County, FL
8,489 posts, read 17,221,373 times
Reputation: 5397
You need to call a few more lenders.
Even during the boom times not all lenders did land loans.
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Old 01-22-2009, 08:29 PM
 
Location: Salem, OR
13,681 posts, read 31,092,362 times
Reputation: 11983
Out here there were few banks that did land loans. Most people went to Bank of America for land loans...
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Old 01-22-2009, 08:49 PM
 
Location: Houston, Texas
10,425 posts, read 43,121,729 times
Reputation: 10313
Quote:
Originally Posted by aus10 View Post
We own some land in Florida. Appraised value 120K. We still owe about 40% on it.

We'd like to make some improvements which will cost us 50K. We will be putting 25K in cash down, and would like to borrow 25K more, and roll the two loans together. We are not doing the improvements to sell it, we are doing the improvements so that the land is more usable for us.

Our credit is immaculate, (over 800 last check) and we have several accounts at that bank.

I was told no loans for land only, and that I can't use my equity in my land for collateral. I explained, I didn't want to take out an equity line, and that I was putting the 50% down for the improvements. Still no go.

I'm sorry to be ranting, but exactly what did this bail-out do, if there isn't any money for the banks to loan? The lady at the bank also told me that the bank wouldn't even loan the money to purchase raw land anymore. Is this happening nationwide or just in FL?
What did the banks do with all that bail out money meant to loan and loosen up credit?

Oh that's easy. They all proceded to buy up some weaker banks with it to make themselves stronger and keep the change.

Does anyone see fraud here?

I have some choice words for these banks but if I said it here I would get banned.
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Old 01-23-2009, 10:40 AM
 
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,958 posts, read 18,302,048 times
Reputation: 6345
There are some companies that fund land loans for agricultural purposes, your property may or may not fit their criteria. worth a googling for agricultural land lenders.
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Old 01-24-2009, 08:30 AM
 
9,807 posts, read 12,699,780 times
Reputation: 8127
Most non-Ag bamks aren't too keen on loaning money on --raw--land.
(and you didn't state if your --raw land--was agriculture.

In your scenario, you would be asking for a $73,000 loan on --raw land--valued at $120,000.

I doubt few non-ag banks would be interested w/o more collatteral offered than just that parcel of --raw land
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Old 01-24-2009, 08:42 AM
 
Location: Great State of Texas
86,094 posts, read 68,853,180 times
Reputation: 27497
Try the Farm Credit Bank for your state.
The Farm Credit System
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Old 01-24-2009, 05:09 PM
 
Location: N. Ga
3,491 posts, read 3,040,406 times
Reputation: 1830
Thanks for the suggestions... I'll try to elaborate a little more...

Land is not agricultural... It is zoned residential. Although, we do not have to build a "house."
The bank that will not loan any more money on "raw land" holds the mortgage on the land now.
We want to make improvements, by putting small structure, utilities, etc so we can use the land. When the improvements are on the land the value "should" rise from 120K to over 170K. So my LTV should still be around 60/40. (I'm basing these values on current values of properties in the area with the same improvements that we will be doing, and the few recent comparable sales.) I will be putting 50% of the cost of these improvements out of my pocket.

The ironic thing about it is the loan officer told me they would loan me a tremendous amount to build a home on the land. Which at the time is really irresponsible of them, and would be for me in this economy. I'm not about to become one of millions who are about to "lose" their homes due to this economy. All I want to do, is to be able to use my land and be able to pay back my loan in a timely manner.....
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Old 01-25-2009, 01:21 PM
 
1,305 posts, read 2,012,459 times
Reputation: 238
Quote:
Originally Posted by aus10 View Post
We want to make improvements, by putting small structure, utilities, etc so we can use the land. When the improvements are on the land the value "should" rise from 120K to over 170K. So my LTV should still be around 60/40. (I'm basing these values on current values of properties in the area with the same improvements that we will be doing, and the few recent comparable sales.)
So what you are looking for is to use the equity of the property as collerteral for a loan, and you happen to want to use the money to improve the property.

The amount of money you have reqested will reduce your equity in the property to an amount smaller than the bank is comfortable with, however, you feel that the property will increase in value once the improvements are made.

Here is why the bank has a hard time with that scenario: What happens if you buy a new truck instead of improving the property? What happens if the well driller you hire never shows but takes your money and runs? What happens if a deep well is drilled and you don't hit water? In all of these cases, the value of your property will not increase (in fact it may decrease) but the bank still needs to be able to foreclose on the property and payoff the loan.
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Old 01-25-2009, 01:23 PM
 
1,305 posts, read 2,012,459 times
Reputation: 238
You should be able to get an unsecured line of credit for the majority of that amount. I have a personal line of credit (no collerteral) for $17.5k with my credit union and also have credit cards with lines of credit far above that amount. Have you considered using unsecured lines of credit?
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