Interest rates, farm financing, mortgage rates, etc

Discussion in 'Iowa Whitetail Conference' started by IowaBowHunter1983, Feb 12, 2020.

  1. IowaBowHunter1983

    IowaBowHunter1983 Super Moderator Staff Member

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    Random thought of the day that might help someone. Mortgage rates are near record lows. If you have equity in your house, its a great way to buy a farm!

    3.375 on 30 year money is badass....

    Have a good day.
     
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  3. Hardwood11

    Hardwood11 Trump 2020

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    Land loan is around 4%, or slightly less in some cases...definitely re-finance time.
     
  4. IowaBowHunter1983

    IowaBowHunter1983 Super Moderator Staff Member

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    On the land side Ive seen 4% on 3 year money. 10 year money was closer to 4.5. What you seeing?



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  5. Wi transplant

    Wi transplant PMA Member

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    Just got 4.25 for 30

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  6. IowaBowHunter1983

    IowaBowHunter1983 Super Moderator Staff Member

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    Who's writing 30 year notes on land?

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  7. Wi transplant

    Wi transplant PMA Member

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    Greenstone farm credit services

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  8. Tim Hull

    Tim Hull PMA Member

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    I got land at 3% for 15, but I refinanced the house. Definitely a cheaper way to go.
     
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  9. Whitetail-Images

    Whitetail-Images Whitetail-Images.com

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    Careful - recreational land has jumped over 100% in the last 5 years driven by low interest rates! Now, if the land pays a decent income through the agricultural crops that doesn't hurt, but still ask any Iowa farmer how they are doing? You might be surprised by his answer! I say if you can write a check for a healthy down payment and still have funds in the bank as a back up and your house is basically paid for "sure" deductible mortgage interest is great way to finance. Economy feels very toppy to me! Just my 2 cents! Peace
     
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  10. BJohnson

    BJohnson Well-Known Member

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    Just got a rate reduction from FCS. 15 yr loan at 4.46% gross, net of 3.46% after the current FCS rate rebate of 1%.

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  11. sep0667

    sep0667 Land of the Whitetail

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    Please explain what this means or how to do this for someone that has never bought land or understands it. Or do you have any sources to study up how this works?
     
  12. Hardwood11

    Hardwood11 Trump 2020

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    So would take out the equity in your home, or some of it, to finance a portion of the land you want to buy. Example $40,000 could be borrowed for the down payment and you would then finance the rest of the farm.
     
  13. IowaBowHunter1983

    IowaBowHunter1983 Super Moderator Staff Member

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    Interest rates on home mortgages are always lower than land loans.

    Interest rates on 30 year notes are at or below 3.5% right now.

    If I guy had a bunch of equity in his house, he/she could refinance the house, pull money out, and purchase a farm. In a round about way you are just paying for the farm, but at a lower rate.

    I have not done this personally, but it would be a great route to go. (I just no- cash out refinanced my house at 3.375% and it made me think of this again)
     
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  14. Wi transplant

    Wi transplant PMA Member

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    Basically if you have a house with equity in it say your house is worth 150k and you owe 75k on it go to bank refinance for 125k. At 3.5pct (example) then you will have 50k for down payment on some ground ! Then buy a piece of ground say 150k. Minus 50k down. Equals. 100k loan. At 3.7 to 4.5 interest right now. So a 100k right now is around 600ish a month ? Aprox and you own 150k worth of land ! Which will hold /apppreciate over time. Verus a new truck payment at 600 month for 6 yrs ? And in 10 yrs its bassicly gone! Just how i see things!! Just an example!!!!!

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  15. Obsessed

    Obsessed Active Member

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    Who'd you get 3.375% on a 30 year refi at? Any points or charges at time of signing? If so, how much? I'm at 3.75%, and would be willing to refi again at 3.375%. Excellent credit, so it's not a matter of being approved, just finding who's offering that rate. Thanks in advance.
     
  16. Wi transplant

    Wi transplant PMA Member

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    Just got 4.25 from farm credit on my whole. Place combined my farm with my house. So after rebate should be about 3.25 ish for 30

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  17. Wi transplant

    Wi transplant PMA Member

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  18. IowaBowHunter1983

    IowaBowHunter1983 Super Moderator Staff Member

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    Midwest family. I think they in urbandale. No points. Min closing costs. When I bought in 2018 rates were at 4.75% and that was with perfect credit, so I got a huge drop.

    Rates rose yesterday and today so doubt 3.375 is available right at this moment. If you pencil it out a 1/4 point prolly not worth it.

    I almost pulled the trigger two other times this summer. Glad I waited!

    Some things are so stupid. Latest drop was blamed on coronavirus fears!!!!!! Bahahaha

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  19. BJohnson

    BJohnson Well-Known Member

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    FYI - sounds like the US 10yr notes hit an all-time low today - 1.31%. the US 10 yr note moves many loan/mortgage rates so now is probably a great time to lock in finance costs.
     
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  20. IowaBowHunter1983

    IowaBowHunter1983 Super Moderator Staff Member

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    You bet. I think you can get 3.25% on 30 right now.

    Dow is plummeting.

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  21. Huntinguy

    Huntinguy Member

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    Is that for a house or ground? If someone can get a 10yr note at 1.31% that's really good. If I my ask did you find a bank to give you that low? Or am I not understanding you right
     

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