Buying land?

Grizzly Bear Said:
Loans are a little tougher to obtain when there isn't a "home.  You can typically expect to have to put 20% down.  You may want to check with the local banks of where you are purchasing as somethimes they will have special programs so you can get by with 15% down.

Tim Sandstrom Said:

Grizzly Bear Said:
Loans are a little tougher to obtain when there isn't a "home.  You can typically expect to have to put 20% down.  You may want to check with the local banks of where you are purchasing as somethimes they will have special programs so you can get by with 15% down.

Yeah still makes me scratch my head how land is worthless in the banks eye unless there is a building on it.

Goosefishmen Said:
Cost of land aside, here is a couple other money things to consider.


1.  15% to 30% down is norm from the banks I have talked with.  As a first time land buyer, you will have to have the cash.  Don't think they will let you use the equity in your house to cover down payment side.

2. Even with morgage rates at all time lows, you are looking at 5%-7%.  The longest you can lock in is 5 years.  Most banks prefer to do 3 years after which time you are at the mercy of interest rates at the time the loan is up to finance your balloon again.

Even is you build a place on it, they will not allow you to put more than 10acres and the house onto a morgage, rest at terms stated above.

Now everyones credit, bank, and buddy may find different deals, but this is what I have found in my personal experience.

 

kjs Said:

Depending on what part of the state you're in, I'd check if there is a 'Farm Credit Services' in your area.  They will take 35% down as noted by some above, but the interest rate for the variable rate is currently 3.9% amortized over 25 years.  Plus since they are a Co-Op, you get a 'profit' sharing check each year so the actual cost is even less - doubt you'll get one of these from any bank.

You can get a fixed rate of around 5.5%, but that's only locked in for 5 years I believe.

kjs Said:

Depending on what part of the state you're in, I'd check if there is a 'Farm Credit Services' in your area.  They will take 35% down as noted by some above, but the interest rate for the variable rate is currently 3.9% amortized over 25 years.  Plus since they are a Co-Op, you get a 'profit' sharing check each year so the actual cost is even less - doubt you'll get one of these from any bank.

You can get a fixed rate of around 5.5%, but that's only locked in for 5 years I believe.

The issue of 10 versus 40 acres comes in with comparables I think.  I was looking at 32 acres and it would be basically impossible for me to get a loan because of the 10 acre limit.  In other words, a survey parcel which would provide a comparable for the appraiser and ultimately the bank or credit union.  Again, this is doing the "conventional" type loan.  There are other ways to deal with it as Farnorth said.

It will make your head spin and yes, as Pat said you will definitely want to look into all of those things.  Rural water is ONE expensive luxury if you have to bring a line all by yourself.  The chunk I was looking at had rule water in the area and had plans to expand the direction the property was.  Plus had another builder coming in.  If they have more than one reason to come they often foot the bill with exception to around 80 to 100 feet and the hook up fees.  Your other option is well water.  That can be a wild goose chase in its own.

Power is pretty cheap.  Most utility companies will run to you as well as telephone.  High speed internet could be a challenge though.

And of course township and county requirements on approaches and new roads.  It adds up quickly.  Drain fields too!  Depending on what you do it will run around 7,000 bucks just to get a septic installed.

If you have some cash on hand I think you can get a loan on some land and pay out to 7 years and at a decent interest rate but you better have intent to build by then or have the money to pay the loan off.  If you have intent you can then roll into a construction loan.

Otherwise the loans are shorter and interest is higher.  I think this is a site I was using quite a bit for information:

http://www.rurdev.usda.gov/HSF_SFH.html

I have some others too but they are on my home computer.

It all makes a guy's head spin!

 

HDFatboy Said:
Anything I've seen lately around here is up for auction.  I've wanted to do the same, BUT, you show up and bid against the guy with the biggest checkbook.  Some of them are so greedy they will go way over actual value, either an out of stater with big $$ or a big farmer that wants it.

eyexer Said:

HDFatboy Said:
Anything I've seen lately around here is up for auction.  I've wanted to do the same, BUT, you show up and bid against the guy with the biggest checkbook.  Some of them are so greedy they will go way over actual value, either an out of stater with big $$ or a big farmer that wants it.

what people are willing to pay at auction is actual value.  what the appraiser says is actual value in all reality is a mythical number