Land Loan

[bwoods11]

Really varies and I see that in Iowa as well. One county that has a history of big bucks, say Decatur, can sell for more than the neighboring Ringgold, but in reality they are the same type of habitat/big deer on each. Neighborhood matters of course, if you get Drury as neighbor that helps!!

 

[Jordan Selsor]

I used FCS three years ago.
Great to work with, would highly recommend them.
Got 4% on 5 yr arm with 15yr payment schedule. Can only go up by max 1% every 5 yrs. Had to put 25% down. My goal is to have it paid for in 5.
As Mo mentioned they are willing to knock off a quarter % if you open an account with them an they direct withdraw.
My father in law got 3.75% and makes only one payment per yr. Kinda works out well for him since he pulls the money out of the stock market...
It's a coop that you have to buy 1k in stock in. I get a nice little 300 profit sharing check every Feb.
Local banks damn sure don't do that!!!!!

 

[tooln]

Making extra payment's is the way to go. I bought my 40 6 years ago. 10% down, fixed rate, 15 year term. Made double payments almost every month. Was paid for 3 months ago. :)

 

[Jayber]

I went with AgStar, 20 yr loan, on my 40 in WI. Cheapest at the time than any bank I checked out.

 

[MoBuckChaser]

I went with AgStar, 20 yr loan, on my 40 in WI. Cheapest at the time than any bank I checked out.

I have a lot of customers that use Agstar Financial for their inputs in MN and WI. You know if they loan in IA and MO?

 

[Doohop65]

I have a friend who is a lender in the farm credit system. According to him your home address determines which farm credit branch has jurisdiction over your loan. They can go outside of that but it takes some approvals.

They function slightly differently but should all be in the same vain. From some other banker friends I have in private lender, you will generally find the best lending terms on rec land from this system.

 

[Bill]

Really varies and I see that in Iowa as well. One county that has a history of big bucks, say Decatur, can sell for more than the neighboring Ringgold, but in reality they are the same type of habitat/big deer on each. Neighborhood matters of course, if you get Drury as neighbor that helps!!

You may not want a Drury as a neighbor. They used to lease the farm next to me. They turkey hunted it and let the groupies deer hunt it. Not the friendliest bunch IMO. Never had to, but was told recovering a deer over the fence was out of the question.

 

[MoBuckChaser]

My Buddy from KC owns 65 acres the borders the east side of Drury's in IA, they regularly hunt guys as close to his border. He said he almost feels guilty hunting his place. Because he has only 65 acres, he can't almost help sitting in his stands watching someone from Drury's coming and going from their stands.

It wouldn't bother me!

 

[Tree Spud]

Making extra payment's is the way to go. I bought my 40 6 years ago. 10% down, fixed rate, 15 year term. Made double payments almost every month. Was paid for 3 months ago. :)

Tooln ... you are a smart man ... ;)

Remember buying my 1st property at age 22. Really happy & proud that I made all of the payments the first 12 months on a 30 year note until I saw the loan note value and I learned that I had only paid off about $2k of the principle and about $7k in interest... :mad: Started adding extra payment every month for principle until I was paying double payments and got the mortgage paid off in about 10 years.

Buy what you can afford based on a 15 year note and then pay extra every month (state extra payment is for principle only on your payment submittal each month) like you said. Once paid off, you have your down payment for your next property.

100% equity & a clear title are a beautiful thing ... ;)

 

[MoBuckChaser]

My buddy called Luana Bank and FCS yesterday. FCS is at 5.75%, Luana is 4.5% on 15 year loans.

Pays to shop!

 

[Big Snow Man]

Tooln ... you are a smart man ... ;)

Remember buying my 1st property at age 22. Really happy & proud that I made all of the payments the first 12 months on a 30 year note until I saw the loan note value and I learned that I had only paid off about $2k of the principle and about $7k in interest... :mad: Started adding extra payment every month for principle until I was paying double payments and got the mortgage paid off in about 10 years.

Buy what you can afford based on a 15 year note and then pay extra every month (state extra payment is for principle only on your payment submittal each month) like you said. Once paid off, you have your down payment for your next property.

100% equity & a clear title are a beautiful thing ... ;)

We did that with our house over the last 5 years making double payments and made the last two payments on our wedding anniversary in October .

 

[kl9]

The interest rate quote you get will fluctuate (sometimes significantly) from the interest rate you receive once the bank underwrites you and understands your financial situation. Sometimes good, sometimes bad.

 

[hookinembig]

Just a quick question for you guys. I totally understand that paying off your land or property is great and gives you peace of mind however, if you would take that same extra money and invest it into a 401k(tax write off now) or Roth IRA(taxes now but no taxes when you with drawl even on your profit but limited to $5500 per year) that will hopefully give you a return of 7 to 9 percent which is pretty reasonable and just keep paying your loan at 2.75 to 5 percent basically you could earn more money through the IRA. Your interest that you pay on your loan is a tax write off and with inflation calculated in you would make even more money. Even at 7% you would be earning an extra 2 to 4.5 percent plus the tax write off of the interest on the loan and the write off for the 401k. Yes you would have to pay taxes on the 401k money when you with drawl it but your income will be lower after you retire so your tax rate will be lower as well.

 

[Bigshooter19]

Just a quick question for you guys. I totally understand that paying off your land or property is great and gives you peace of mind however, if you would take that same extra money and invest it into a 401k(tax write off now) or Roth IRA(taxes now but no taxes when you with drawl even on your profit but limited to $5500 per year) that will hopefully give you a return of 7 to 9 percent which is pretty reasonable and just keep paying your loan at 2.75 to 5 percent basically you could earn more money through the IRA. Your interest that you pay on your loan is a tax write off and with inflation calculated in you would make even more money. Even at 7% you would be earning an extra 2 to 4.5 percent plus the tax write off of the interest on the loan and the write off for the 401k. Yes you would have to pay taxes on the 401k money when you with drawl it but your income will be lower after you retire so your tax rate will be lower as well.

Well said ↑↑↑↑

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[MoBuckChaser]

Just a quick question for you guys. I totally understand that paying off your land or property is great and gives you peace of mind however, if you would take that same extra money and invest it into a 401k(tax write off now) or Roth IRA(taxes now but no taxes when you with drawl even on your profit but limited to $5500 per year) that will hopefully give you a return of 7 to 9 percent which is pretty reasonable and just keep paying your loan at 2.75 to 5 percent basically you could earn more money through the IRA. Your interest that you pay on your loan is a tax write off and with inflation calculated in you would make even more money. Even at 7% you would be earning an extra 2 to 4.5 percent plus the tax write off of the interest on the loan and the write off for the 401k. Yes you would have to pay taxes on the 401k money when you with drawl it but your income will be lower after you retire so your tax rate will be lower as well.

You answered your own statement!

 

[Doohop65]

Keep in mind the only constant in life is change. If your situation changes for the worse, your ability to pay off your notes could be hindered. You can't withdraw money from your tax advantaged accounts until 59.5 without substantial penalty.

I have finally gotten to the point in life that I can save for retirement and shop for hunting land. I would have loved to own land 10 years ago but my future self will thank me for saving first.

 

[kl9]

Just a quick question for you guys. I totally understand that paying off your land or property is great and gives you peace of mind however, if you would take that same extra money and invest it into a 401k(tax write off now) or Roth IRA(taxes now but no taxes when you with drawl even on your profit but limited to $5500 per year) that will hopefully give you a return of 7 to 9 percent which is pretty reasonable and just keep paying your loan at 2.75 to 5 percent basically you could earn more money through the IRA. Your interest that you pay on your loan is a tax write off and with inflation calculated in you would make even more money. Even at 7% you would be earning an extra 2 to 4.5 percent plus the tax write off of the interest on the loan and the write off for the 401k. Yes you would have to pay taxes on the 401k money when you with drawl it but your income will be lower after you retire so your tax rate will be lower as well.

In most cases interest on land is only deductible from your revenues you earn on that land as well as other Sch.E rentals, passive activities. An individual that is a high W2 earner cannot offset W2 income with land interest, unless it is a primary residence as well.

 

[Bigshooter19]

Threw an IRA you can pull money out with no penalty. You just can't pull out what money it's made threw interest. You could pull out every dime of principal you want.

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[Doohop65]

Threw an IRA you can pull money out with no penalty. You just can't pull out what money it's made threw interest. You could pull out every dime of principal you want.

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This is spot on. You can pull contributions from your Roth IRA with no penalty.

This is also some of the most valuable financial space you have access to. This money grows tax free and you only get 5500 in space unless you are more "mature" than I am and then you get catch up contributions.

I can not stress enough what a bad idea it is to use this money. It will lower your quality of life down the road. This game is a marathon not a sprint. Don't take short term pleasure at the cost of long term pain.

 

[chickenlittle]

I have taken contributions back out of my Roth IRAs in the past. I plan to shift more contributions to my Roth instead of my 401k for that flexibility. After enough to get my employer's match, I will max out our Roths before putting more in the 401k or cash reserves.

One caveat is a Roth has to be open for 5 years before you can take contributions out (unless rules have changed in the last few years).