Land purchase, financing questions

Discussion in 'Chit-Chat' started by alia176, Jun 12, 2018.

  1. alia176

    alia176

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    Thinking about buying an adjacent property but seems like most financial institutions don't like to do undeveloped "vacant land" loans due to higher risks. Owner said he'll finance but we haven't come to any final price yet. I wanted to know what rate/terms he has in mind but wouldn't mind finding out the current rate/terms in the loan industry.

    Looks like my credit union does 75% of purchase price at 5.90% loan for 12 years. Are there other institutions that are known to offer decent rates/terms for vacant land purchase?

    I'm aware of doing a HELO or equity cash out process for this transaction.

    Thanks for your input.
     
  2. CJF

    CJF

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    Do you own your home outright, or still owe on it?
     
  3. alia176

    alia176

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    I just re-fied so still owe on it.
     
  4. TXSunDevil

    TXSunDevil SILVER Star

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    Is there a Capital Farm Credit in your area? They are usually competitive and specialize in land loans and rural lending. The ones here are a Co-Op so you usually get a check at the end of the year that helps off set the interest rate.
     
  5. pb4ugo

    pb4ugo SILVER Star

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    Here in Ohio I went thru Farm Credit Services. Their rates were just as competitive for vacant land, as a banks rate and time were for a home mortgage. They were real easy to work with. I see similar business thru out the midwest.
     
  6. doug720

    doug720

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    Don't forget credit unions. They typically have great rates and can be flexible on terms and land types.

    We just bought another property and used one of the credit unions we belong to in CA to buy property in Nevada. The interest rate is 3.15% fixed on a 30 year.
     
  7. alia176

    alia176

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    Thank you gents, VERY much appreciated.

    My CU is horrible at 5.9% with a 12 year term.
     
  8. '74 UA FJ

    '74 UA FJ

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    Interest rates on land are going to be a good bit higher than for a home. If you can do owner financing at 5% I'd say go for it.
     
    CatskillsRunner likes this.
  9. alia176

    alia176

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    Hmm, ok, good to know.
     
  10. alia176

    alia176

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    Just for S&G, I reached out to my title insurance company with whom I just re-financed last week and here's what she said. Please let me know your thoughts on going through a Title company as I'm a TOTAL newb on this type of thing.

    --------------------------------------------------
    Hi Ali, probably the biggest item it to make sure the property being purchased (vacant or otherwise) that the property is not land locked (Meaning you don’t have access) also making sure there aren’t any liens that could potentially transfer From one owner to another owner if a deed is record and title is not checked. Also, there may be restricted covenants or a

    HOA in place that you may not want to be a party to. Title insurance is a really important item to have

    And it’s your best tool when you are dealing with any real estate anywhere. I understand that there are cheaper ways for folks to buy and sell property without title insurance, but your best defense and due diligence is buyer beware and go the

    Extra mile to have that title insurance. Hope this helps, Thanks, Candy
    ------------------------------------------------------------

    More info from me: no HOA, not land locked and no clue on any liens. Seems like this gent has this property since the early '80s and he is out of state in NC. So, my *guess* is that there aren't any liens as no work has been done on the property, it's total natural/untouched.

    What say you?
     
  11. ravewoofer

    ravewoofer Las Ventas

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    I’d check to see if there are any property tax liens. Out of state owner easily could have missed a few quarters due to mailing issues or general laziness.
     
  12. TXSunDevil

    TXSunDevil SILVER Star

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    I will tell you what I have learned buying rural real estate in Texas. First thing I do is get a survey. The survey shows boundary lines and gives you an accurate measurement. You want to be sure you are getting the amount of land the seller is representing. It will also show any easements and road frontage. I put the property under contract for a set price and send it to the title company with a check for earnest money. I use a generic contract from TREC which is the Texas Real Estate Commission. The title company does a title search. This title search should turn up any liens or additional owners that you may be unaware of. I get a title policy on the transaction. This offers some protection if there ends up being some lien or something. I think this is the title insurance she is referring to in her email. Once the title company does a title search I send all of it to be reviewed by an attorney that specializes in real estate. Mineral rights are a big deal here. I have learned to do title searches so I can vet most of the land before I buy it. It is not hard to do by yourself at least not here.
     
  13. pb4ugo

    pb4ugo SILVER Star

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    When I purchased my land, one of the contingencies in the offer was that the landowner was to have it surveyed with the boundaries clearly marked. The acreage was slightly less than advertised, so the offer was adjusted. I hired a lawyer to do a title search. I know the bank/farm services will do that too, but they do it to cover their butt, not mine. Good luck on your possible purchase. Go into it eyes wide open.
     
  14. alia176

    alia176

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    Thank you gents, lots of good info. The owner did do a survey couple of months back. I'm suppose to talk to his realtor today and find out some details.
     
  15. 1911

    1911 chupacabra

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    I used these guys to buy some land in Santa Fe County 10-15 years ago; the process was fairly painless. They charge more interest than a home mortgage, but not ridiculously so.

    Ag New Mexico Farm Credit
    Loan Products
     
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