Financing land in SE Iowa

[Diggdug]

Does anyone have experience with a GOOD lender that will mortgage 100% Timbered land in SE Iowa for a fixed rate at 25 years? I called Farm Credit Services but they require that you have farm income from the land if it is vacant.
Thanks!

 

[4DABUCKS]

I do all mine through Luana Savings bank outta Polk city. I'm sure for an all timbered track you are gonna have to have 30-35% down. Also you probably are not going to find a 25yr fixed.

 

[IowaBowHunter1983]

Probably not finding 25 years on that type of ground. IF you do, you are going to be paying for it with much higher rate. I would start local. FCS is great, but they have very little flexibility. They have their corporate rules and guildlines. I have found the small local banks have a LOT more latitude on rate, fees, apprasiels, etc. Negotiate. They want your business if you are well positioned. Just 2c from a small timer. Good luck

 

[Diggdug]

Thanks! I bought the land a few years ago and it is worth about double what I want to borrow. Currently in a 5 year balloon at 5%. I'm looking to go fixed fro 20-25 years...

 

[HorseDoctor]

Take that info to a handful of banks and ask them what would be willing to do? I was amazed at the differences between institutions last time I checked. You should be able to find a decent deal somewhere. Good luck!

 

[jjdohm]

Got my loan thru FCS but Bank of The West was working pretty hard to get the loan also. They had a better rate but the FCS dividend was my deciding factor.

 

[Hardwood11]

Thanks! I bought the land a few years ago and it is worth about double what I want to borrow. Currently in a 5 year balloon at 5%. I'm looking to go fixed fro 20-25 years...

I would say you will be able to get a loan if the land has equity...Call Ray at Luana Savings Bank in Polk City, tell him your situation and what the land is worth. They may look at 10 year fixed, 20 year amortization.

 

[treerat]

Got my loan thru FCS but Bank of The West was working pretty hard to get the loan also. They had a better rate but the FCS dividend was my deciding factor.

The dividend is definitely something to consider. The past few years it has paid 2 months of interest for my farm loan.

 

[Tim Hull]

How much equity do you have in your house? I just refinanced my house to buy my 50 acres. You get a lower fixed rate that way but you must have a lot of equity in it.

 

[Diggdug]

Thanks everyone! I have almost no equity in my house... It looks like Farm Credit Services will give me a 25 year mortgage at just under 6% fixed. With the dividend the effective rate is around 5.3% so I am going to work with them...