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This may be a dumb question, but where do you go to get a loan on vacant land? I'm looking at some land to buy that is raw land. I asked my bank where I have my home mortgage and they don't do loans for land without a home already on it. So, does anybody got any decent places to look? Any references?
 

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The bank here in town had no problem giving me a loan for vacant land. They would only give me a 15 year loan though. I would check out some other banks, or some banks in neighboring towns.
 

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That is a good question. I have noticed that several banks have stopped giving land loans since the whole housing market crashed. We got one a few years back through Bank of America, and I was looking into purchasing some more land and found that BoA doesn't give land loans anymore (at least our bank didn't) and there were several others I called that pretty much gave me the same story, "we use to, but not anymore"

Good luck to ya! :cheers:
 

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Trapper Groupie
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It used to be impossible to get unimproved land financed around here unless ya had a large dowm payment
 

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Most will not give a loan for vacant land on a 20 or 30 year note. Occasionally you may find one, but it is pretty rare I believe. Most want 20% down and some type of ARM. They simply don't want to assume the responsibility without having some sort of something they can sell on it in the event you go belly-up.
 

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Check with the closest town to the property. Most small town banks have loans for Unimproved Land. Pretty sure you need a chunk (thinking 40%) of money down unless you have other property to use for collateral.

Did mine for 10 years at 4%.....but it was paid off two years ago.:claphands:
 

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Discussion Starter · #8 ·
Thanks guys. I'll check with the local banks.
From things I had read on the internet I was expecting to pay a big down payment and get like a 10 or 15 year loan.
 

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Confirmed Bachelor
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Commerce is another bank that doens't do land loans.

MM's right about local banks being the best bet. The big banks don't want to mess with them becuase they can make more mone and take less risk on auto/home loans, etc.
 

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[rquote=1493661&tid=104315&author=PoisonSnake]Most will not give a loan for vacant land on a 20 or 30 year note. Occasionally you may find one, but it is pretty rare I believe. Most want 20% down and some type of ARM. They simply don't want to assume the responsibility without having some sort of something they can sell on it in the event you go belly-up.[/rquote]

exactly. Cant buy any unless you have some...wierd how that works. The little man is always gettin the shaft
 

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You might want to check something like Farm Credit Services. I was working with them trying to get a loan for a tractor, they ended up not being to help me with that, but I discussed unimproved land loans with them, and they said that was a large part of their business. Here is a link to their website.

http://www.myfcsfinancial.com/default.aspx
 

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You can always use collateral to buy raw land. If you have enough equity in an existing property, the bank isn't sticking its neck out as far. Unimproved raw land is a crap shoot for a bank.
We're buying some land next to us right now (hopefully) and using our land as collateral. We're offering 25% down, and a 2 year note.
Ask me in a week how it went!:cheers:
 

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"Of all the transactions that we have been involved with, one Bank stands out above the others. That Bank is Peoples Bank and Trust. Peoples Bank and Trust understands farm and recreational property lending and their terms and conditions have consistently been fair and competitive with others. Whether you are looking to finance a few acres or a few thousand acres, Peoples Bank and Trust is there to assist you and provide a one source lending relationship. Give them a call or click on the convenient link to receive a no-obligation pre-qualification. This pre-qualification will guide you in determining the loan amount and farm size that best fits your'e budget. Feel free to call or e-mail them as well. "

http://www.pbtc.net/
 

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I don't have an answer, but wanted to point out its a buyers market if you can close fast. Just bought a nice tract for 22% off the listing price (100% down :D) - been saving for 25 years tho...
 

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Talk with Farm Credit Services. They have good reasonable loans and specialize in long term mortgages on raw land. I spoke with a representative a couple of years ago before the recession hit and he offered some good long term rates. This has adjusted some I'm sure with the credit crunch all lending institutions are in, but I would check with them. Bottom line is they specialize in land and farm loans, your regular bank probably does not. This means that you may get a locked in rate for much longer than you would at your regular bank. I know this stuff because I'm a realtor. Good luck!!
 

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Having been in banking for a number of years, I can tell you a raw land loan is hard to get because
1. Many banks don't offer that type of loan (or at least don't advertize / waste their time)
2. They require a large down payment or collateral
3. The interest rate is usually through the roof


Most people who buy recreational hunting ground do so by taking out a line of credit or home equity loan. I don't know if that's even an option for you or if you're interested in doing it.


It's been a while, but when I worked for US Bank I vaguely remember them offering that type of loan. I don't know if they still do or not.
I know they offered an (up to depending on credit) $10,000 unsecured multi-purpose loan at a very high rate. If you're just a tad short on cash, that might be enough...
 

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20% seems to be the standard minimum for a down payment. If you contact the realtor listing the land, more often than not they can put you in touch with a lender who will finance you provided you have the 20% down payment.
 

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Every bank wants the buyer to put down a significant chunk, like mentioned before usually 20%. That being said sometimes you could get away with a little less of a down payment if the seller will owner finance some of it. Although the seller financing may secure the bank in the same loan to value scenario for example 10% down and 10% owner financed is the same numbers wise to the bank as 20% down. However, the bank typically views this as a bit more risky because the buyer has less invested or less skin in the game, therefore they may be more apt to walk and leave the bank holding the bag. If your credit is solid, your debt to equity ratio is favorable, good income, all the important stuff, you may be able to get away with a little less down and have the seller finance part of the down payment. A good bank will look at every scenario individually.
 

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AgriLand!

www.agriland.com

I use them a lot since I try and keep most of my work with farm and ranch and rural land. Lots of the hometown banks here are wanting 30-40% down on raw land!!! Talk about a chunk of change! Agriland has pulled a few deals outta the tubes for me! Easy to work with and a good solid company too!

Let me know if I can help you in anyway!
 
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