How hard it is to get a mortage if......

Discussion in 'Homesteading Questions' started by farmwife, Jan 12, 2007.

  1. farmwife

    farmwife Well-Known Member

    Jan 5, 2006
    you have only 11 acres. I should say we wanted to refiance for a fixed rate. When we bought they only did residental or mega farms, no in between. Well, it was our bank and dumb us should have checked it out more.

    Now we want to get a fixed rate, but a residental is less than 5 acres and us at 11 acres isn't something you can make a living off of, so they think. Well, it is too small to get an ag loan.

    Now we are looking at finding a private person to do this or go with another bank who will do a seven year loan fixed, but than it can go up after 7 years.

    Any advice? We heard that banks just don't see the value in substainable farming or if you farm you will go down in the books. We see differently with direct marketing.
  2. jill.costello

    jill.costello Well-Known Member

    Aug 18, 2004
    Ocala, FL
    I would look into dividing the property; refinance the house and 5 acres at your low fixed rate, and do a land note on the remaining 6 acres. Simple! (if it's allowed.....I'm just guessing from what we went through to purchase our 9 acres)

  3. gardenlily

    gardenlily Member

    Dec 21, 2005
    DH an I are buying 18 acres on a fixed rate with AgSouth doing the financing. Maybe they have a branch office in your area. Worth checking.
  4. Ford8N

    Ford8N Well-Known Member

    Nov 29, 2006
    Sauk County, WI
    Shop around and don't be restricted by a local bank. There are so many mortgage programs around that it will make your head spin. Talk to several local banks, then talk to a few mortgage brokers that can shop with lenders all over the country.
  5. wombatcat

    wombatcat Well-Known Member

    Mar 29, 2005
    We only have 15 acres and Wells Fargo has our mortgage and also refinanced us a few years ago with no problem at all. So I think the poster who recommended shopping around was giving you good advice. I think that you can get the mortgage you need if you look at the right program. Also, you might want to check with your county to see if they have any recommendations for you, who knows, they might even have a special "hobby farm" program or something goofy like that where you would end up saving never know! I know our county has some different programs available, too bad we didn't qualify for any of them, but it might be worth looking into...
  6. Farmerwilly2

    Farmerwilly2 Well-Known Member

    Oct 13, 2006
    lat 38° 23' 25" lon -84° 17' 38"
    I was going to suggest Wells Fargo also. They carry our place and the tractor.
  7. Rockin'B

    Rockin'B Well-Known Member

    Jan 20, 2006
    No. Illinois
    No idea where you live, but our 10 acres, barn, and home is financed on a 15 year fixed. We went through a mortgage broker that we knew, but this kind of financing is common. We could have also done a 30 year, but wanted the shorter payout.
    Countrywide and Washington Mutual have done ours in the past.

    In most areas, mortgage brokers are a dime a dozen.

    Edit to add: They would not have cared how many acres it was as long as it appraised right for the loan.
  8. Shadow

    Shadow Well-Known Member

    Jan 10, 2006
    We have our place financed by a bank. We have 120 acres but they only loan on the house and the 35 acres we first bought. They did not want the other acerage. Its harder to borrow money on land. Now if you are making your money to pay them back farming you are in a whole new ballpark. They will have to have a real good track record where you have been doing this for some time and all the records to support your income. Usually regular banks are not interested. You will have to go to land banks or goverment agency and the paper work is just more than I ever want to fool with. Good luck
  9. Macybaby

    Macybaby I love South Dakota Supporter

    Jun 15, 2006
    South Dakota
    Is your problem really with the size of the land? Or is it that you can't qualify financially for a fixed rate mortgage of the amount you want. The third problem is that you actually want more money than the land is worth as collateral. Then you may need to look into a mortgage and a note. But you need pretty good credit to get an unsecured loan of a significant amount.

    I've never heard of not being able to get financing because of the amount of land. Conventional will do just about anything. HOWEVER conventional is the one with the toughest financial requirements.

    I will add I'm in SD, so banks here are very use to people having acreage (of all sizes).

  10. goatlady

    goatlady Well-Known Member Supporter

    May 31, 2002
    No. Cent. AR
    It also depends on the home on the land and your credit rating, not the amount of land you have or what you do with it.
  11. seedspreader

    seedspreader AFKA ZealYouthGuy

    Oct 18, 2004
    NW Pa./NY Border.
    I don't know their situation, but around here, if the major value of your house/acreage is the acreage and NOT the house then it is much harder to get financing. It's silly yes, and a hold over from a long gone time when land was plenteous and cheap and hard to get rid of.