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How do land loans compare to mortgages?
Posted on 12/24/15 at 5:05 pm
Posted on 12/24/15 at 5:05 pm
If I wanted to go out and purchase 100 acres tomorrow as a "camp", how would a land loan compare to mortgage rates?
5
Posted on 12/24/15 at 9:18 pm to TigerTatorTots
Pretty much have to have 20% down and even with excellent credit the interest rate is going to be a few points higher than a home mortgage.
Posted on 12/25/15 at 8:50 am to TigerTatorTots
Banks are generally going to want you to have a lower LTV (larger down payment) on any mortgage that isn't your primary home mortgage. If you want a good deal on a land loan go to a bank that specializes in land loans such as First South Farm Credit.
Posted on 12/26/15 at 4:20 pm to TigerTatorTots
What state are you in?
There are much better options than First South for a land loan.
There are much better options than First South for a land loan.
Posted on 12/26/15 at 4:24 pm to nelatf
Louisiana
Posted on 12/27/15 at 10:52 pm to TigerTatorTots
Louisiana Land Bank is the correct answer here......I would not hesitate to do business with them.
Posted on 12/28/15 at 7:58 am to TigerTatorTots
Correct me if I am wrong, but if there is any structure on the property that may be construed as a dwelling it may be possible to consolidate the land into a home mortgage.
Posted on 12/28/15 at 11:29 am to jeffsdad
What I have seen with my transactions is that if the acerage is separate from my primary residence, it will be a loan segregated from my mortgage....regardless of what structure.
Plus, I'll set up recreational and timber purchases outside my name but I have to guarantee.
The beauty is that local commercial banks are doing some really great things as far as rates and terms. Then, if the loan qualifies, I want to use Land Bank.
Plus, I'll set up recreational and timber purchases outside my name but I have to guarantee.
The beauty is that local commercial banks are doing some really great things as far as rates and terms. Then, if the loan qualifies, I want to use Land Bank.
Posted on 12/28/15 at 12:28 pm to TigerTatorTots
20-30% down. Lower LTV than your mortgage. Land is higher risk for banks because they don't want to be stuck with trying to sell it if a borrower defaults. A few points higher than a mortgage also. Your best bet is a local community bank who knows the area and values, not a corporate chain bank. You could come out better if it had a dwelling but the dwelling has to pass appraisal, so if it's a shack don't count on a 30 year note.
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