Tim Hull
PMA Member
Any bank will do a loan for rec land. I just got approved for a loan yesterday at one of the banks here in Muscatine. If you have good credit, good job and some assets it shouldn't be a problem. Most rec land is a set apr for the first 5 years then it balloons up to 9%. I am going to look around. You can go up to 20 years.
treerat
Active Member
I had a loan through our local credit union but recently refinanced with Farm Credit Services. They have a much better fixed rate than what I could find anywhere else. FCS serves Allamakee and other NE Iowa counties. I originally called AgStar which is similar, but they cover a different area. If you are in a different part of the state, I would recommend calling AgStar or FCS and they should be able to direct you toward a similar ag-lending specialist in your area.
Hardwood11
It is going to be a good fall!
Luana SB
If you are in the Des Moines, area check with Luana Savings Bank, they finance land and have a very competitive rate.
If you are in the Des Moines, area check with Luana Savings Bank, they finance land and have a very competitive rate.
kjohn15
Member
Just be careful on the structure of the loan. If you are getting an Ag loan (Farm Credit or a big bank) it must show that there is ag income on the land to make money. A lot of the bigger banks have trouble lending on Rec ground because it is labeled consumer purpose (unless you are a company/outfitter with a tax I.D.) and not eligible for an Ag/Business Loan making it a higher interest personal loan product. The bigger banks are watched very close on this. One way around this would be to mortgage another piece of pure ag ground and do a cash-out refinance. It would allow you a great interest rate and less headache. If you don't want the absolute best rate by messing around with the larger banks then just stick to a community bank. Thay will have more wiggle room and still have a relatively attractive rate. Hope this helps. It is as clear as mud :drink2:
spltbrow
Member
vrod said:
I just bought land last year and am looking at buying more this year. 35% down at farm credit services for rec land. I did squeeze them down to 30% on the property I bought last year because it had tillable and crp income. I was also aspecting interest rates on a 20 yr to be a little better than they are.
No way. I haven't seen a bank that didn't loan on straight timber/rec land. Maybe it exists but I haven't seen it. I've seen many folks get loans on straight rec/timber with 25-35% down, in some rare cases, maybe 40%. You'll have plenty of options.
spltbrow
Member
Sligh1 said:
Hey sligh do you know any banks that are a 25% down? I would love to find one as 10% less down would be great. Just asking as those banks probably are out there but the 2 banks I deal with are 35% down unless it is mainly tillable. Do you have any recommendations or referrals?
spltbrow
Member
Scott said:
Thanks for the info I will look him up. My credit is good and debt to income is good. I do lots of banking on the residential side with new homes as I am a home builder. So I am very familiar on the residential side with banking and loans, but my residential bank can't do that great of a rate on the ag side as it is not there forte.
Thinkin Rut
PMA Member
What is the interest rate that you pay after you put your money down? Would you be better off building a working cabin on it and calling it a second home so you can use it as a tax deduction?
I "think" second home would make it worse for tax purposes. U need to get with ur accountant. If it's a "farm building" and farm operation, I would say that's ur best tax ramifications - but again, check w/accountant. All my stuff is schedule-f farm operation. It's a business. I would imagine rec land is still a tree farm, real estate investment and farming operation.
i purchased an additional 16 acres that adjoined the rest of my farm 3 years ago. I went through FCS. They wanted 25% down but I got them down to 15%. I did have to sign an agreement saying that I am buying this land with the "intent" to build a house on it. I asked if I have to build on it before the loan is up and they said no....it was a technicality to get the % down lower.
My interest rate is 6%, which seems high to me.
My interest rate is 6%, which seems high to me.
Hardwood11
It is going to be a good fall!
Iowa land loan
Try Ray @ Luana Savings Bank, he has been flexible, not sure of their percent down...but rates are under 5%.
Google for their number...tell him a guy from MN sent you (I'm working on a loan with him today)
Try Ray @ Luana Savings Bank, he has been flexible, not sure of their percent down...but rates are under 5%.
Google for their number...tell him a guy from MN sent you (I'm working on a loan with him today)