Land Loan

[mtholton]

Hi All,

Just found this site for the first time today, it has been a great resource already. I'm looking to purchase a piece of hunting land in WI or MN in the next year. Just looking for advice on what lenders you have all used and what kind of terms can be had?

Thanks,

Matt

 

[tylorklein]

I just closed a loan on my 40 acres Friday. $50.5K purchase price and I financed $40.4K. I went with 15 years fixed rate at 5.96%, hoping to pay it off sooner, but I didn't want the balloon in case I do not. Closing cost on such a small loan were high (almost $2,500), but the process was easy enough. I used Northview Bank out of Finlayson (found them while googling the same question) and the land is in central MN (near Milaca). I talked to a couple other banks, but most focused on balloon instruments (59 months being the most common) for hunting land.

 

[MoBuckChaser]

Different banks will loan to different types of borrowers. If you have a debt to asset ratio down under 30% and With credit in the 775 or better range you should be able to still find money in the 4% range although it is slightly climbing right now.

 

[tylorklein]

I was thinking the same thing and I may not have looked around enough to find the best deal, but all the ones I talked to quoted the rate first and didn't want to budge based on quals for rec land. Just refi'd to 15 years on the house at 2.75 percent in the fall; if I had been thinking land purchase then I would have tried to use the equity there and roll them together somehow v. a separate loan.

 

[MoBuckChaser]

Have you tried FCS? A friend of mine just got approved through them, was pretty simple. I dont know what the rate was. Maybe try FSA.

https://www.fcsamerica.com/

https://www.fsa.usda.gov/programs-and-services/farm-loan-programs/interest-rates/index

 

[Needmorebrush82]

I purchased another 60 acres last year and learned some from it. First of all closing costs can be dramatically cut if you force the issue. My bank kept wanting to have a survey done when the land had just been surveyed. At first they lied and said they couldn't do the deal without it and I walked out and my banker met me at the door to say we can make it work. Then the banker wanted to press the issue that they will not loan on raw land without some sort of collateral because raw land has a high default rate. I pulled out my phone and called the bank next door and they busted that on speaker phone and suddenly he could figure out how to do that as well. Simply put I explained to him I realize I am only 34, but my credit score is a bit over 800 and I own multiple properties, it was not my first time to play the game. Let them know you do not care who you get the money from, if they don't want to sell you money you could care less and move on. I wouldn't pay over 6% in the market today for raw land even though banks claim that is the going rate. They can negotiate rates, you just have to make sure that they know you are by no means hard up and you will do business with the first person that meets the goal. In the end the land owner was paying for the closing so I didn't really care but you have to stand your ground and stand it firm. That bank wants to sell you money even though they get the we are helping you out attitude sometimes. Generally you can shop around and find one that will do it for 10% down.

 

[MoBuckChaser]

I will agree on closing costs are a bit of a scam of sorts. Points, origination fees, document fees, title searches and all that crap can add up. Sometimes getting the cheapest rate may get you some of the highest closing costs. I would ask about interest rates and the closing costs, along with terms and the costs related to the amount of down stroke you have. Most places charge more interest if you have just the minimum 20% down on vacant land! less interest, if you have more down stroke!

 

[Buck Ridge]

I went with FCS on my loan. They gave lengths up to 30 years at a fixed rate for recreational land. You are able to refi your term and rate 1 time per year at no cost. Went from a 25 yr to a 18 yr in 3 years. I will use them again in the future.

 

[buckdeer1]

The secret on any land for purchasing or for taxes is to get the title recreational land off,Do timber,ag or anything and it will help.I just went to a regular bank and they were more than happy and I used the land for collateral.Which all depends on what you have to pay

 

[Bigshooter19]

When I did mine I used the land and my house as collateral which drove my interest rate down. My credit score is good in high 700's. Interest rate is 3.75 for land and 3.23 for my home. I use my local bank. Was at a different bank they dicked me around for a while so i went down the road and moved everything down there. My advice would be shop around you don't own loyalty to any bank.

 

[Someday isle]

Don't overlook a HELOC either.

 

[MoBuckChaser]

Don't overlook a HELOC either.

Thats good for us guys with lots of equity in their home, no good usually for younger people.

 

[Bigshooter19]

Thats good for us guys with lots of equity in their home, no good usually for younger people.

Yeah that's for sure. I'm only 28. I just used my house for little extra collertal to drive me interest down. My dad always told me pay interest is not in your best interest. But he like mo old and has to much money unlike guys like me that have to save up to be poor!!! Lol

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[MoBuckChaser]

Yeah that's for sure. I'm only 28. I just used my house for little extra collertal to drive me interest down. My dad always told me pay interest is not in your best interest. But he like mo old and has to much money unlike guys like me that have to save up to be poor!!! Lol

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Pretty easy to build up lots of equity. First of all a guy can't do anything stupid that costs a guy money. And working 3 jobs for 25 years helps as well. Gives you no time to spend money for one thing! LOL

 

[bwoods11]

Good luck with the purchase. I hope you find the right farm. Local banks can be good to work with... Farm Credit Services is popular with many.

I use Luana Savings Bank in Iowa, great to work with.

 

[Someday isle]

Thats good for us guys with lots of equity in their home, no good usually for younger people.

Very True!

 

[MoBuckChaser]

Good luck with the purchase. I hope you find the right farm. Local banks can be good to work with... Farm Credit Services is popular with many.

I use Luana Savings Bank in Iowa, great to work with.

Luana have any banks in NO MO? Do they loan in Missouri?

 

[bwoods11]

I don't know Mo, but they finance Missouri farms I know that.

Big land lender

 

[gwm]

When I purchased my property I went thru a local bank. A couple of our local banks won't deal with vacant land at all including the one I have my home mortgage thru.

I bought a neighboring property a year ago and refinanced all of it with Badgerland Financial. I got 4.25% fixed at 20 years.

 

[Bigshooter19]

When I purchased my property I went thru a local bank. A couple of our local banks won't deal with vacant land at all including the one I have my home mortgage thru.

I bought a neighboring property a year ago and refinanced all of it with Badgerland Financial. I got 4.25% fixed at 20 years.

My first bank I had my mortgage threw wouldn't give me a loan either unless it had a home or buildable site on it. That's why I switched banks

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