Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 11, 2016 20:48:51 GMT
I went to my bank today to find out about financing a piece of land. I only need to borrow 10 thousand dollars. They said their minimum was 25 for raw land. The guy I talked to said I could finance the house I want to build with the land together but the minimum was much higher and I only want to spend 20 or 30 thousand on the tiny house I want to build. I don't think I'll qualify for a much higher loan nor do I want one.
Has anyone found a bank that will loan small amounts for land?
|
|
|
Post by jassytoo on Apr 11, 2016 21:54:49 GMT
Around here it is difficult to find bank financing for raw land. Mostly it's done on an owner contract. That's how we bought the last two pieces we've had. Have you tried that yet?
|
|
|
Post by kawaiitimes on Apr 11, 2016 22:04:16 GMT
If you have a decent enough credit score, you may be able to get an unsecured personal loan for $10k. Downsides are that the interest isn't tax deductible and your interest rate will likely be higher. But we have done an unsecured personal loan for $5k before and the process was pretty easy.
|
|
|
Post by AD in WNC on Apr 11, 2016 22:15:14 GMT
Our local credit unions could loan money on land. Could you borrow the larger amount and then pay the extra money back as the first payment?
|
|
|
Post by LauraD on Apr 11, 2016 22:54:42 GMT
We went through the farm credit system. FCS Financial is the name of it in our neck of the woods, but it may be different in yours. (My understanding is that the system is regional, and each region has its own institution.) My credit union wouldn't touch raw land, and a guy I work with - who is currently in the process of buying land to put a house on - is also having to go through FCS.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 12, 2016 0:09:35 GMT
jassytoo, I haven't asked about owner financing. That's worth a try!
kawaiitimes, I'm not sure about an unsecured loan. My income is pretty low but then I hardly have any expenses either. My credit was fair/good last time I checked. My credit union's loan officer is supposed to call me. So I guess I'll find out about that angle then.
AD in WNC, I'm not sure maybe. I'll check that out since there will be more that just the land cost, like a water meter and elect. hook up, etc.
I was also googling agricultural land loans and found several that service Texas but I don't know anything about them. There's Capital Farm Credit, Heritage Land Bank, Lone Star Ag Credit. Any of Y'all heard of them? Know anything about them?
|
|
|
Post by shellymay on Apr 12, 2016 0:28:26 GMT
Strange rules or laws you have, here we can finance any size or value of land NO limit on dollar amount But they require 15% down on the amount you are wanting to borrow for said land!
|
|
|
Post by beowoulf90 on Apr 12, 2016 11:36:04 GMT
As others have said check your local Credit Union or bank and see what their top Signature loans are. For example the Credit Union we belong to has a top Signature Loan of $9,000, the term depends on you but is up to 3 or 5 years. I just took a $5,000 Signature loan for a 2 year term and am paying $110 every 2 weeks ( I get paid every 2 weeks and I'm paying more than I have to, just to pay it off quicker.). A good portion of that will go back to them after I repair the truck. So far I've used about $1,000 of it to purchase a new bed, and 2 new fenders and a door (for my dads truck) from the salvage yard. I've spent $795 and that includes taxes. Oh and I bought a 1/2" drive 18.8 volt Impact wrench. for $240. I only need to replace the catalytic converter and the exhaust behind it yet. Once that is done I'll have basically a new truck and will give back what I don't use.
You may also want to check and see if your Credit Union is "risk" based.. Banks are "risk" based and that is one of the reason for differences in interest rates for the same loan to different people at different rates, dependent upon credit rating. Where as if they aren't "risk" based, everyone gets the same interest rate as long as they meet the minimum credit rating set by the institution.
|
|
|
Post by Skandi on Apr 12, 2016 12:03:27 GMT
While I can't help since I'm, not in the US, I do feel for you, we had exactly that issue when we wanted to buy a 350k DKK house we wanted to borrow 400k. but the minimum was 500k and "oh you do not earn enough to borrow 500k" we didn't WANT 500k!
|
|
|
Post by moldy on Apr 12, 2016 16:45:21 GMT
We haven't had good experiences with farm lenders. Right now, we have a revolving business credit line (that took us 2 years and jumping thru a bunch of hoops with our local bank to get). When we bought our pasture, we were short. Even though we were trying to borrow less than half of the price (and about a third of the worth) of the land we couldn't find anyone to help us finance it. I ended up borrowing 50K from my parents (and yes, it is a LOAN - even though Dad would have rather had it a gift). We pay back $500 a month to them and pay them 3% interest - more than they'd make on a savings account.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 13, 2016 2:07:28 GMT
Owner Financing usually works but you will be paying higher interest.
Rockpile
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 13, 2016 20:01:14 GMT
Strange rules or laws you have, here we can finance any size or value of land NO limit on dollar amount But they require 15% down on the amount you are wanting to borrow for said land! That's the thing, I can put over 50% down but they still won't loan that little. I think it has to do with the minimum profit they can make. Greedy Bastards. The loan office still hasn't called me back. Probably ignoring me because he can't make any money on me. Update: I called him. Nope. Minimum mortgage is $150,000. Apparently my only hope is a signature loan.
|
|
|
Post by shellymay on Apr 13, 2016 21:56:04 GMT
Wonder what would happen if you called across state lines to a different bank in another state, NOTHING keeps me from buying land in another state.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 13, 2016 23:53:04 GMT
Talked to the bank again. It's a NOPE on the signature loan. My income is too low. sigh. I just have to find land I can pay cash for. That's about as likely as finding a unicorn.
|
|
|
Post by kawaiitimes on Apr 14, 2016 11:15:11 GMT
@buffy,I know how hard that is. A couple of years ago we found a gorgeous piece of property that had long been abandoned. It was bank owned and they wanted cash only. The price was exactly in our affordability range with a mortgage, but they would not consider financing. We went around to everyone we knew with some money to help us float the purchase so we could buy with cash and then finance, and we just could not get it together. Came up $20,000 short and someone else came along and nabbed it.
It is really difficult when you can see yourself on a piece of land and it just doesn't come together. But keep saving and you will get there.
|
|
|
Post by aoconnor on Apr 14, 2016 12:33:43 GMT
Owner Financing usually works but you will be paying higher interest.
Rockpile Not always. A lot of owners will finance for the going interest rate. Ours did.
|
|
|
Post by aoconnor on Apr 14, 2016 12:35:25 GMT
Talked to the bank again. It's a NOPE on the signature loan. My income is too low. sigh. I just have to find land I can pay cash for. That's about as likely as finding a unicorn. Buffy, if you can put half down, talk to the land owner. They may very well be willing to carry the rest. I would if a buyer had half down!
|
|
|
Post by tenbusybees on Apr 14, 2016 12:39:05 GMT
jassytoo, I haven't asked about owner financing. That's worth a try! kawaiitimes, I'm not sure about an unsecured loan. My income is pretty low but then I hardly have any expenses either. My credit was fair/good last time I checked. My credit union's loan officer is supposed to call me. So I guess I'll find out about that angle then. AD in WNC, I'm not sure maybe. I'll check that out since there will be more that just the land cost, like a water meter and elect. hook up, etc. I was also googling agricultural land loans and found several that service Texas but I don't know anything about them. There's Capital Farm Credit, Heritage Land Bank, Lone Star Ag Credit. Any of Y'all heard of them? Know anything about them? At the time we bought our place six years ago the amount of land was the deal breaker...we inquired with Heritage and Lone Star both plus others. To get a farm/ag loan it had to be 30 or more acres, for a house it has to be less than 10 acres. Our place is 20 acres.
|
|
|
Post by moldy on Apr 15, 2016 2:24:21 GMT
you might try crowd funding, several people loan you money and you pay each one back with interest.
|
|
|
Post by willowgirl on Apr 17, 2016 15:07:12 GMT
Before you buy land, look into the cost of the necessary site improvements (well, septic or sewer hookup, electric hookup, natural gas if applicable, excavation such as a driveway). Unlike land, you generally won't be able to finance these things, outside of using high-interest credit cards or signature loans. Site improvements can cost as much or more as the land itself, depending on variables such as the depth of the well.
If I were in your shoes, I'd try to find an owner-financed used mobile on a private lot (where you own the land). Because of the depreciation on mobiles, often you can acquire one for little beyond the cost of the land and improvements. Live in the mobile while you save up to build the tiny house, then tap into the existing well, septic, etc. Scrap or sell the trailer. (Make sure the zoning will allow this.)
|
|
|
Post by mollymckee on Apr 17, 2016 20:36:52 GMT
Good idea willowgirl, here the only way to sell a single wide is with owner finance. You can't get a mortgage from a bank on one. One of our friends started a small construction company. He found financing in the classified adds from private investors. He said it was a good way to get money you couldn't get from a bank. Just be sure you had a good lawyer, some of the investors just wanted to make more interest, some were crooked.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 22, 2016 19:00:33 GMT
It sounds like the $25k minimum loan was just that one particular bank's policy. So I would talk to some different banks.
However if you could get the loan for $25k, it might buy your land, do the utility hookups, build the tiny house etc. The payments on $25k for 15 years should be down around $200, so still doable on most incomes.
|
|
|
Post by AD in WNC on Apr 23, 2016 21:14:28 GMT
Around here people use Vanderbilt to finance single sides. A friend is looking at using them to finance a land-home package. Maybe they are licensed in your state too.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 26, 2016 0:05:42 GMT
Well, while I was trying to find financing the land I wanted got taken. I've expanded my search area to 5 surrounding counties and found nothing I can afford. I kinda feel like I'm Unicorn hunting. My Mom did say she would help me with the money, If I can ever find anything under $20,000.
|
|
|
Post by kawaiitimes on Apr 26, 2016 5:50:11 GMT
The right property will come, and it's great that your mom is willing to help!
|
|
|
Post by countrymom22 on Apr 26, 2016 19:24:15 GMT
Sorry to hear that you lost the land @buffy, but maybe that's a sign that it wasn't the right place for you. Keep saving your money and looking around. I hope you find something else.
Around here the banks won't lend money for unimproved land, period. There are minimum amounts for loans, as well as minimum sizes for the home you build. It's crazy, it keeps people like us from being able to do what we want in this area. We are forced to borrow more money than we need and build bigger houses than we need.
Good luck in your search and don't lose sight of your dream!
|
|
|
Post by mollymckee on Apr 27, 2016 4:18:35 GMT
Check every so often to be sure the sale goes through. Here about 50% don't.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 29, 2016 5:16:01 GMT
We'd likely try and just save to buy it outright with no loan.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 29, 2016 16:44:02 GMT
gibbsgirl, The only problem with that is that I have to be out of here within 6 months. No time to save.
mollymckee, I didn't think of that. I'll ask my real estate agent to keep an eye on it just in case. Thanks!
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 30, 2016 0:40:28 GMT
This is craziest thing I've ever heard. I had no idea a bank would turn you down for not borrowing enough! My first mortgage was for $17,000 for a house and 2 acres of land!!!!!! My bank actually loved me bc I went back twice to borrow more for additional land and another round of remodeling. I ended up with my original house and 2 acres worth more than 6 times the original price not counting the additional acres and the bank got a couple of closing fees off of me. Win win all the way around. I'm curious as to what areas of the country y'all are talking about.
|
|