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land mortgages
Does anyone know what term a financial institution would allow for a land only (no house) loan? I sorta figured they would not do a 30 yr term like a home, but wasnt sure what was normal length. Also what sort of interest rate can you get with a land only purchase? Can you get about the same as a new home?
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land mortgages
It varies tremendously; depending on which financial institution you use, whether you are already a customer, your credit rating, etc.
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land mortgages
15-20 year loans are common, with 20% down. The interest rate is considerable higher than a conventional mortgage on a house. If you either have as many as 40 acres, or you are financing you residence on smaller acreage, the Federal Land Bank seems to be a pretty good option. My bank loaned 80% on my 24 acres when I bought it, but the rate was 9.5% while mortgages were about 7.5%. I'm right now figuring on doing a refinance with Federal Land Bank since we have now built our barn that we live in. Another option is to carve out a small part of the acreage for the homestead and get a conventional, low interest mortgage and then have a bank loan (higher interest) on the rest.
Of course owner-financing can be a good option if you can get it.
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All types of loan institutions will hesitate to provide unsecured loans on property you do not plan on improving almost immediatley, like the construction of a new home. Loans for unimproved property will require a higher pecentage of money down and will have higher interest rates. The most receptive institutions will be ones closest to the property, preferably smaller chain banks, who need the business. Another option is your local bank who deals with farmers on a regular basis. In PA the institution is called "Farm Credit". They offer home and land loans, welcome the business and are familiar with the problems related with the purchase of farm property which is often unimproved land. Good Luck.
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My Bank allowed me to include my 16 acres in the same mortgage with my home at 7%. The properties are deeded separately.
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We bought 20 acres in IN. We had to put down 25% to get the normal rate, but other than that, it was a normal 25 year mortgage.
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ThatGuy, start by calling all the small savings banks in your area to gauge if you will be able to live with the terms. In 98 we bought a 38 acre wood lot in southern ME even though we had no equity to speak of. We don't make much money either but have good credit histories. We had no debt. I had spent the previous 3 yrs mostly taking care of my young children and working on the side while my wife worked full time. We drive old cars etc. I spent a solid week on the phone before finding a small local bank who held their loans. We have a fixed 7.25% loan for 25 yrs with 15% down. It was supposed to be a variable rate loan and thus should have gone up a little but the bank paperwork was written incorrectly. I stayed away from building loans because of the time constraints they put on you, usually 9 mths here in the northeast. We currenty have well, septic and foundation in and I'm looking forward to cutting a timberfame this summer from logging that I've done; if spring will ever get here. Good luck
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