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Buying Land Interest Rate
Posted on 4/8/20 at 7:24 am
Posted on 4/8/20 at 7:24 am
When buying a large piece of land, are interest rates the same as mortgages for homes? Cost of land is around 250k, not familiar with buying raw land.
10
Posted on 4/8/20 at 7:28 am to lsualum2432
Buying land is usually 80% LTV with 15-20 year amortization from what I have seen. It will also have a higher interest rate. I have been quoted between 5.5-6.5% within the last two months.
Posted on 4/8/20 at 7:29 am to lsualum2432
I bought land last year in March 6%, make sure and use a land bank in the area. I used Southern Ag credit
Posted on 4/8/20 at 7:30 am to lsualum2432
How large, usage, business plan?
If it’s anywhere close to a commercial deal figure 2-4 pts higher if you can get it done today with the currents events.
If it’s anywhere close to a commercial deal figure 2-4 pts higher if you can get it done today with the currents events.
Posted on 4/8/20 at 7:40 am to lsualum2432
No where close to home mortgage rates, a few points higher depending on multiple factors, and you will need 20%up front , land banks are the way to go, I highly recommend Ashley McDaniel with firstsouth Farm credit, she will walk you through the entire process and they offer up to 30 year deals
Posted on 4/8/20 at 8:17 am to lsualum2432
I've bought a few tracts with my local credit union over the last 10 years. 3.2-3.5% interest, 15% down, for 15-20 years. Call around to some credit unions and see what their rates are. If the rates are good then find out what it takes to join the credit union. Usually there are 20 different ways to qualify to join.
ETA: There was 1 credit union offering 10% down but the interest rate was considerably higher, which is understandable. Regardless of int rate, I was surprised to see they offered it.
ETA: There was 1 credit union offering 10% down but the interest rate was considerably higher, which is understandable. Regardless of int rate, I was surprised to see they offered it.
This post was edited on 4/8/20 at 8:41 am
Posted on 4/8/20 at 9:15 am to lsualum2432
Also be prepared for a hefty survey fee as well depending on the tract. I know I for one wasn't expecting that large of an expense for a survey when I purchased my land in 2017.
Posted on 4/8/20 at 9:26 am to lsualum2432
I work in the corporate office of a land bank. Rates will probably be around 6%, however we pay patronage out each year. At the moment long term loans will be kind of hard to come by until all this blows over.
Posted on 4/8/20 at 10:24 am to lsualum2432
A good real estate agent ( I realize for some thats an oxymoron) can talk to you about the pros and cons of different lending institutions and arrangements.
There’s more to consider than just the rate and down payment (granted those are huge).
It could well be that there is no need of a survey, or appraisal, saving you unnecessary costs.
If you are a frequent buyer and seller of land, an agent may well be of little benefit to you, but if you are asking about interest rates, it’s likely a good agent can help you.
There’s more to consider than just the rate and down payment (granted those are huge).
It could well be that there is no need of a survey, or appraisal, saving you unnecessary costs.
If you are a frequent buyer and seller of land, an agent may well be of little benefit to you, but if you are asking about interest rates, it’s likely a good agent can help you.
This post was edited on 4/8/20 at 10:26 am
Posted on 4/8/20 at 11:45 am to Jobo
quote:
however we pay patronage out each year.
This is huge, just got my check this year and was just about enough to cover 2 payments, effectively lowers the interest paid by better than a point, of course the formula they use to pay the patronage each year is based on the profit the land bank makes in such a year, I am willing to bet the profit will be much lower in the next few years depending on how bad the recession gets, JMHO
Posted on 4/8/20 at 11:48 am to lsualum2432
I got a great interest rate for the 300 acres I bought in SELA bordering SWMS 2 years ago. I only finaced it for 12 years though.
A lot of banks won’t do a strictly land loan only for over 20-30 years. If they do they’re going to rape you on interest.
A lot of banks won’t do a strictly land loan only for over 20-30 years. If they do they’re going to rape you on interest.
Posted on 4/8/20 at 11:51 am to southside
quote:
I've bought a few tracts with my local credit union over the last 10 years. 3.2-3.5% interest, 15% down, for 15-20 years. Call around to some credit unions and see what their rates are. If the rates are good then find out what it takes to join the credit union. Usually there are 20 different ways to qualify to join.
I used a credit union as well and in my opinion, it’s the best way to go if you’re buying recreational property. I bought my 300 acres going through a local credit union, then we used the same one for an additional 600 acres my family and I bought in Tensas.
Posted on 4/8/20 at 12:24 pm to bayoudude
quote:
Also be prepared for a hefty survey fee as well depending on the tract. I know I for one wasn't expecting that large of an expense for a survey when I purchased my land in 2017.
There's a lot of labor involved to survey timber land. The surveyor has to cut a line through the trees/thicket to get line of sight with his survey equipment. Can't always GPS everything to find the corners.
Posted on 4/8/20 at 2:47 pm to lowhound
quote:
There's a lot of labor involved to survey timber land. The surveyor has to cut a line through the trees/thicket to get line of sight with his survey equipment. Can't always GPS everything to find the corners.
Oh for sure. My piece was very thick with some tough elevations to walk by the creek and in the drains. Cost me $7,500 but was good piece of mind for myself when dropping that kind of cash on land.
Posted on 4/8/20 at 4:08 pm to bayoudude
quote:
I for one wasn't expecting that large of an expense for a survey
If there isn't a current survey then request that the seller supply a survey within x amount of days of contract. If the survey is old or not up to your standards you can request the seller pay for a new one. Likely they won't blink at paying for a survey if they're about to make a sale.
From experience, make sure all CURRENT neighboring fencelines are marked and rods are IDed with GPS coordinates on the survey. It can be hell trying to track across acres and acres trying to find a tiny rod in the ground and using a property description that is 20+ years old.
Also from experience, title insurance is important when purchasing land off of family successions or land that hasn't passed hands recently. Lot of skeletons could be dug up down the road and it's very nice when all lawyer fees are covered by insurance on your end.
Posted on 4/8/20 at 4:31 pm to lsualum2432
Our La. Land Bank note is 4.3% as of today. We did not put anything down, just used another piece of property as collateral for LTV.
Posted on 4/8/20 at 5:47 pm to geauxskeet
Shopped hard here recently and got 3.75% on 10 year with 20% down.
Posted on 4/9/20 at 6:24 pm to southside
quote:
rods are IDed with GPS coordinates on the survey
This is virtually useless unless your a surveyor retracing the property. You dont own a GPS that will get you within 20' of that rod.
It's a much better idea to have the surveyor note 3 ties on the plat to permanent objects such as trees or existing fence corners. You can even do this after the fact on your own, but it won't be recorded on the plat for future reference. Painted trees are also very visible to yourself and most wandering neighbors.
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