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My wife and I am interested in purchasing some property in the mountains with the idea of building on it after retirement. We are eyeing a particular property right now (which is currently an operating hay farm in SW VA) and are trying to figure out the best method for financing. After calling around, it seems like this is our biggest challenge yet!
What is the best method of obtaining a bare land loan? It seems like none of the national banks are in the bare land loan business any longer. The farm credit mortgage companies and FSA programs seem to be the only viable options these days.
Where should I be focusing my investigations? What kind of rates can I expect? I have learned and am beginning to realize that the rates are considerably higher than normal conforming mortgage rates! Please help...
There is a lot more risk to financing land. You can walk away without risking the roof over your head. So it is a lot more expensive, and you will be asked to make a large down payment.
To make it harder, a lot of appraisers don't want to appraise land. Comps are difficult and the opinions of value vary too widely.
My wife and I am interested in purchasing some property in the mountains with the idea of building on it after retirement. We are eyeing a particular property right now (which is currently an operating hay farm in SW VA) and are trying to figure out the best method for financing. After calling around, it seems like this is our biggest challenge yet!
What is the best method of obtaining a bare land loan? It seems like none of the national banks are in the bare land loan business any longer. The farm credit mortgage companies and FSA programs seem to be the only viable options these days.
Where should I be focusing my investigations? What kind of rates can I expect? I have learned and am beginning to realize that the rates are considerably higher than normal conforming mortgage rates! Please help...
Check with local banks, and prepare to have about 25% down payment
We've also been looking for land. Landowners are more often willing to owner finance than homeowners...probably because of the difficulty getting a loan on raw land. You might ask the seller if it's an option. Maybe you could write into the contract a balloon payment at a certain point once you build. At that time you could refinance the whole package together.
Do you have equity in your home where you could get a Home Equity Loan? This is the avenue we took when purchasing raw land in the Boone area.
Quote:
Originally Posted by Boodee
Yes we do, and that's one good option that we are exploring right now. I thank everyone for their responses so far!
I would suggest pressing for owner financing of dirt before promising my primary residence as collateral for the dirt.
Things change in life, and risking the roof overhead for unimproved dirt is a VERY aggressive investment proposition.
I owned a 52 acres next to city of Lake view Oregon.I would like to borrow against it ? whre doI get the financing ?
Dr Lam
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