Lenders

Discussion in 'Iowa Whitetail Conference' started by sep0667, Oct 9, 2020.

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  1. sep0667

    sep0667 Land of the Whitetail

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    Farm Credit Services of America (FCSA) seems to be the best/most common lender for land purchases here in IA, at least that is my assumption. Is there a consensus on that for those of you on here?

    Any idea on current interest rates?

    (The wheels are turning in my head)
     
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  3. BJohnson

    BJohnson Well-Known Member

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    I have my two farm loans with FCS. No complaints so far. I put a decent % down on both of mine.

    We have been able to reset both loan rates down after 12 mths for a reasonable fee. My last reset was 3.20% fixed, before cash dividends. The other loan was reset in Feb 2019 at 4.46% fixed before dividends. The current annual dividend equates to 1.00% of ave loan balance. I might reset the other loan again in Feb if rates stay at recent levels.

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  4. Brett Morris

    Brett Morris PMA Member

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    Ironically I just talked to Farm Credit yesterday. Going to re-finance our farm through them. They can't lend more than 65% of appraised value. Current rates on 15 year fixed was 3.79% and they pay a 1% dividend every year so effective rate is 2.79%. They also do longer fixed terms. I'd be refinancing right now, not sure how rates could get any lower.
     
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  5. sep0667

    sep0667 Land of the Whitetail

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    Any references to some reading I could do to help wrap my head around how it all works before I take the next step and contact a lender? For example, you guys are talking about annual dividends, I'm not sure what that means.

    For example, say I have 90k I could feel comfortable putting down. Just looking at the FCSA loan calculator on their site it is defaulted at 5.5% interest rate. So say a property is listed at 235k. With a 90k down payment my principal would be 145k and at 5.5% interest my monthly payment would be $830 on a 30 year term...……….does this seem right? And I should be able to get an interest rate under 4% right now?
     
  6. arm

    arm Leg

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    Their dividend is not guaranteed every year, just like any company on the planet that pays annual dividend. Short history has been good of course...just don't go in thinking it'll always be there.

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  7. Hardwood11

    Hardwood11 It is going to be a good fall!

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    You should be able to get better than 5.5%. I am at 3.6% thru Luana Saving Bank in Iowa. Their website has the rates. 30 year might be tough to get, amortize for 20-25 ...good luck!
     
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  8. EVIL X

    EVIL X Member

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    I could be wrong, its been since 2018 when I purchased through fcs, but I believe their longest term offered to me at that time was 20 years.
     
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  10. IowaBowHunter1983

    IowaBowHunter1983 Super Moderator Staff Member

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    I've used several, but FCS seems to beat them all. I refinanced everything with them recently. They were covering all costs during covid (Fees, appraisal, abstracting, etc). Plus the dividend. It was too good of a deal to pass up.
     
  11. deerdown

    deerdown Active Member

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    Wow! That's a good deal!
     
  12. nontyp

    nontyp Active Member

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    Correct me if I’m wrong, but I’m assuming the dividend is considered taxable income right?
     
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  13. BJohnson

    BJohnson Well-Known Member

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    Yes it is taxable income

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  14. seven twenty

    seven twenty PMA Member

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    If you write off the interest, it would Almost be a wash I would think.
     
  15. IowaBowHunter1983

    IowaBowHunter1983 Super Moderator Staff Member

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    Yes, part of farm income.
     
  16. Slick

    Slick Active Member

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    If you don't mind me asking what rate were you able to get? For sure a plus getting the fees, appraisal, and abstracting thrown in. I am about to do a loan with Rural 1st for 3.1%. Not going to change because everything is set in place just curious.
     
  17. IowaBowHunter1983

    IowaBowHunter1983 Super Moderator Staff Member

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    High 3s before dividend. Under 3% affective rate. Could have gotten lower but I chose to go fully fixed as it's all long term holdings.
     
  18. Diggdug

    Diggdug Member

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    I have two loans from FCS. Both are 25 year and both on vacant woods, no tillable. I just did a rate adjustment down to 4.07%, Dividend is usually around 17-19%. I have had only good experiences with them!
     
  19. sep0667

    sep0667 Land of the Whitetail

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    Back to the top......what is that loan or whatever you want to call it where your house can be used as part of the down payment interest free on land? Or something like that? 1031 or something like that? Clearly i'm not well versed in this stuff. Thanks for the help guys.
     
  20. arm

    arm Leg

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    Call the lender to get facts


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  21. Kaleb

    Kaleb Active Member

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    Home equity line of credit? They will still certainly require interest payments though


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