Financing or Cash?
Our recommended Lenders (Find their contact info below)
Josh Bruckert: Compeer (Farm, Vacant Land, Recreational Land)
Jared Leis: Citizens State Bank (Commercial or Conventional)
Jason Schultz: Nations Lending (Conventional)
Cash gives us a ton of leverage and flexibility in a competitive environment. There is options after the sale to then use financing but being able to offer cash contracts increases our chances to win. Sellers look at offers with cash as more of a “sure thing”.
- Land can be more difficult to finance
- Generally you will need 20% - 25% down in cash or equity
- Fixed rates are more difficult to come by
- Usually loan is amortized over 20 years
- Financing Land/Home
Conventional financing: Buying Land With A Home
- Banks want to ensure this property will not be used as a business.
- They most likely will not like lending the whole property if the land value is more than the home.
- Lower interest rates, 15 & 30 year Fixed rates and 30 year amortization.
- 5-20% down Cash or Equity.
- This option provides flexibility
- 20% to 25% down Cash or Equity
- Can add in improvement costs
- It can be treated as business
- 20 year amortization
- 5 year fixed rates
- Higher interest rates
- Compeer - Specifically specializes in agriculture properties and provide similar lending options as conventional
- Fixed rates
- 30 Year amortization
- 20% down cash or equity
- Can lend on properties that have higher land value than home
- Can include construction loans with purchase
- FSA - State agency that offers low and fixed rates for individuals buying a farm
Don’t worry about your finances, choose the professionals who’ll take care of them.
You’re just starting your search to purchase a new property – this is an exciting time! Before you schedule your first tour, getting prequalified for a mortgage is an important first step. Here are the things you need to prepare
- Personal documents
You’ll need two forms of government-issued ID, your social security number, divorce papers if applicable, as well as proof of ownership of other property.
- Review your credit report
You should be able to do this free of charge. Be sure to dispute any errors or provide an explanation for late payments or derogatory items. Then, keep your credit score healthy by avoiding any new credit inquiries, canceling any credit accounts, or lowering limits with any creditors. Doing any of these things could lower your credit score.
- Tax returns
You’ll need to provide tax returns for the previous year, and potentially for the last two years.
- Proof of income
Gather W2s, paycheck stubs, 1099s, or a year-to-date profit and loss statement if you’re self-employed. You’ll also need to show other income sources such as Social Security, child support (and proof children’s ages), or government assistance.
- Proof of assets
Provide bank statements, mutual fund statements, account balances for retirement accounts, 401Ks, IRAs, and any money held in the stock market.
- Debt summary
You’ll need to provide a summary of your debts, monthly payment amounts, child support payments and balances for credit cards, student loans, car loans, other property loans.
- Financial issues
You may need to provide a written explanation if you’ve had bankruptcy or other financial issues in the past.
- Down payment and closing money ready
Have these funds ready in your bank account. If you received this money as a gift, you might need to provide a letter from the gifter explaining the gift is not a loan.
Compile proof for the past year with canceled checks or money orders to show rent was paid on time.
- Mortgage pre-approval successful
Do some comparison shopping and contact other lenders. A home is likely the largest purchase you’ll ever make, do your homework to ensure you get a competitive deal.
Having years of experience on the market, we’ve learned how important a trustworthy mortgage lender is during your real estate journey. Put your faith in a leading lender awarded for the exquisite customer service and appreciated for the competitive offers. Choose the business that pair knowledge, individual approach, and integrity, taking care of the most satisfactory results for you.
Our Lending Recommendations For Southwest Wisconsin
Company: My City Mortgage
VP | Business Banking Officer
Phone: (608) 785-2265
Website: Citizens First Bank