Land Equity Loan

[WillandHelen]

Anybody know anything about borrowing off your land for cash or using land as a collateral. I've heard banks don't like this because land is harder to sell than a house. I'd like to look into it though. I've got plenty of land but no money to build.

[kyle]

Will,

Yes banks (some not all) will lend on land only. Usually the most they will lend is 50% of value. And they will be conservative on the land value! Its a nice way to go if you can get enough to build because you don't have to deal with the boat load of paper work and restrictions for a construction loan.

I suggest checking with small local banks!

[Basil]

I have 70 acres with only a house trailer. I borrowed 100% of the purchase money, but I got a good deal on good land at a bankruptcy auction. I got the remainder of the farm through owner financing.

I have cattle, fencing, etc, which makes what I did possible. I borrowed 20,000 as a "farm use" loan, which is a lot like a personal loan. They just tacked it on to my future advance clause on the farm.

There is little or no oversight on this type of loan, if you are using it to improve your farm you qualify. I used it to pay for my foundation, logs, and a fence.

[WillandHelen]

Sounds good. I'm trying to stay away from construction loans. That industry seems to be gauged for something different than using "unconventional building methods" A "farm Improvement" loan sounds right down my alley. Maybe that verbage is key to getting a bigger loan if neccessary. Thanks.