Getting a mortgage

[MadMerv]

I am REALLY frustrated! A bit of background, then some questions. We have an 800+ credit score. Debt to assets ratio of 11%. Should be able to get a great rate for a new mortgage, right! So we signed on a place in KY: 17.42 acres, four year old house, and a price of $150K. Most lenders don't want to touch it because it is non-conforming......not us, but the property. Why? I can't find anything at FanieMae or FreddieMac that have guideline on the property. Lenders say too much land, unconventional construction, no comps. What gives? Only two lenders even got to the point of saying yes, BUT they want 30% down, only twenty year loan, and 6.25%. HELP!
Merv

[HudsonHawk]

That's pretty messed up.

They are afraid that if you default it will be too hard to resell the property and want to make sure they are covered with the higher interest and large down payment.

[Miatamoto]

pm sent

[sammm]

unconventional construction

Again?

Find a good mortgage broker. Maybe your real estate agent can recommend one.

[Dave04]

You are probably also dealing with banks that don't "understand" country properties.

I had a similar problem when I bought 17 acres in Anna and built a house on it. None of the big banks wanted to touch it. We finally went in and talked to a credit union and the loan officer lived in the area we were wanting to buy/build... he green lighted the whole thing. Even set us up for a "one time close" on the building part.

You might consider finding a lender in the KY area, open an account and then start talking to their loan officers.

[Titus]

Have you tried any of the local banks in the area of the property? The national banks are tending to shy away from what they don't understand (as they are finding much higher losses in the non-conforming portfolios), but the local banks should be more knowledgeable of the area and therefore more willing to loan (unless they simply believe you signed a bad deal). I would think you would be able to find a local bank willing to do it with 20% down. I suspect that less than 20% down on a non-conforming loan is ancient history these days.

[MadMerv]

Thanks for the ideas. I've tried them all and nothing is working, so far, and that is a local bank.

Since no one asked, I'll volunteer on the unconventional part. I didn't see it as a problem, but...... House has 2060 sq.ft and garage is another 1300 sq.ft., all in an 84x40 metal building. Actually, they are calling it a pole barn house. It's all framed normally, it just is built inside this big shell. It's a very nice house, so I just don't get it!

The loan isn't really a big deal. I just think we're getting screwed by the lenders

[sxk122]

i was in a similar spot 3 years ago when i bought my place, and am stuck with a 7% mortgage. I had a 780+ credit score, but had no large loan history. Why one asks? Because I had bought everything cash up to that point in my life. Even my school loan was for under 10k, and i had practically zero credit debt (why pay interest). One of these days im going to get around to trying to refinance. Hell, I'm the only person I know that pays an extra 25% on each payment toward principle. The banks can be stupid sometimes. I essentially get penalized for being a responsible person who lives within my means and actually pays for things.....

[Miatamaniac92]

Tried a USDA Rural Home Loan? I don't know any of the details just heard the name.

http://eligibility.sc.egov.usda.gov/...lcomeAction.do

Chris

[CarCar]

I had the same experience 15 years ago when we bought our 80 acres with a 1600 sqft house, 40x40 shop, 40x30 barn outside of any city limit. Some lenders would only loan on the value of the house but not the land and they did require 30% or more down. We had a motivated seller that agreed to owner finance with 10% down and no closing. Since everything that has happened in the mortgage industry the past few years I am grateful I have nothing to do with those brilliant financial wizzards of Wallstreet. I don't know about KY but most states have a land bank for ag and rural properties. Texas has Texas Land Bank but I don't kow if they would do anything outside of Texas. You should also inquire with Ky agriculture department, they could be helpfull with directions to programs, agencies and lenders for rural properties and business.

[MadMerv]

Tried a USDA Rural Home Loan? I don't know any of the details just heard the name.

http://eligibility.sc.egov.usda.gov/...lcomeAction.do

Chris

That was interesting! We make too much money since we are working. When we move up there, only on retirement, THEN we would be eligible. What's wrong with this picture?

[Ataim]

PM sent... Good luck.

[Dave04]

House has 2060 sq.ft and garage is another 1300 sq.ft., all in an 84x40 metal building. Actually, they are calling it a pole barn house.

Yeah... when I sold the place we had to go through an appraisal. The first guy that came out looked at the 36'x48', 5 stall barn with running water, ac, tack room and concrete floors and wrote it down as a $0 add to the appraisal.

We found another appraiser...

good luck!

[Radio-Active]

Yeah... when I sold the place we had to go through an appraisal. The first guy that came out looked at the 36'x48', 5 stall barn with running water, ac, tack room and concrete floors and wrote it down as a $0 add to the appraisal.

We found another appraiser...

good luck!

If the primary buyers are assumed to be in the agricultural business, I could see that as a reasonable appraisal. In Kansas Wheatland's, a house is considered a reason to lower the value of the land. After all, you can't grow any bushels on a piece of land where the building resides.

I might suggest talking with the local Farm Bureau insurance agent in KY. The Texas Farm Bureau even has it's own credit union.