Your Country Dream Can Come True!
Maybe you’ve been dreaming about owning land in the country for years, or maybe it’s a newer goal. Are you thinking of a weekend getaway for camping or hunting, of life as a farmer, or maybe you want to invest in timberland? No matter your dream or how long you’ve been dreaming it, your path to financing your country life with Farm Credit can be as straightforward as a walk in the park.
Preparing For Your Land Purchase
Before you shop for your rural land, find out how much money you’ll have available to spend by learning how large a loan you’ll be able to obtain. Before you contact a lender, get your financial house in order:
- Review your credit report to ensure there are no surprises, resolve any errors that appear, and prepare explanations for any outstanding issues like a prior bankruptcy or series of late payments.
- Collect your financial documents, usually several years of tax returns and W-2 forms, and several months of bank statements.
- Gather your down payment – for rural land you’ll likely need to put down 15 - 20% of the purchase price or have equity in other property you’re willing to use to help secure the new loan.
Find The Right Guides
Having the right people by your side makes any journey go more smoothly. For a rural land purchase, you’ll want two experienced guides:
Your realtor: make sure you’re working with a reputable professional with experience in rural land sales, or even someone who specializes in this type of property. The right realtor will be able to help you fnd the parcel to support your long-term plans, and when a purchase is initiated can help you meet all the important deadlines in the sales contract.
Your lender: find a lender like Farm Credit with deep experience in rural properties, who understands things like valuing timber, access and easement rights, and food insurance requirements. Your Farm Credit lender also knows about diferent loan programs and associated down payment requirements that may help you reach your goal. Working with a lender early to get prequalifed for a loan makes you more attractive to sellers, especially in a tight market. You can reach one of Farm Credit’s Rural Lending Experts at 855-GoRural.
A Fork In The Path
TOUGH TERRAIN AHEAD
If you discover you won’t qualify for a land loan just yet, don’t worry – you have the power to improve your fnancial position so you’ll be able to apply successfully in the future. Your lender can advise you about steps to take from reducing debts, to projecting income generation from the property, to considering lowercost parcels.
THE PATH IS CLEAR
When all signs point forward, it’s time to initiate the formal loan process. Here are the steps to apply for and close your land loan:
- Contact your Farm Credit Rural Lending Expert at 855-GoRural. If you aren’t already working with one of our lenders, they’ll ask you about the land, current structures, your intended use and other things to gain a better understanding of your goals for the property.
- Complete the loan application and provide financial documentation.
- The lender will review the application and supporting documents to make sure all is in order and request any additional documentation needed.
- The lender will initiate an appraisal of the property to determine the market value.
- The lender will initiate title work through a title company or attorney to make sure the property has no liens or ownership complications along with obtaining title insurance that covers the lender’s mortgage. As the soon-to-be new owner, for a small fee, you can have a separate title insurance policy issued at the same time to protect your investment in the property.
- If required by the lender, or desired by you, initiate a land survey early in the process, especially if the land is part of a larger tract or subdivision.
- Review loan documents, which will be provided by your lender, to make sure they reflect the terms you discussed including amortization, interest rate and fees.
- At closing, you, your lender, and your attorney (if you have one) will review and sign the loan documents. You’ll deliver the down-payment, if it hasn’t already been transferred electronically, and assume ownership of your new land.
- If you choose Farm Credit to finance your land, you’ll become a member-owner of the lending cooperative and immediately become eligible to share in the annual rebate of excess profits distributed to our members in the form of patronage.
Reaching Your Destination
Follow this simple guide to purchase the rural land of your dreams. The perfect start is contacting Farm Credit at 855-GoRural – our Rural Lending Experts are eager to help you reach your dream of country living.