Hi my dad wants to purchase a farm it has a house and 500 + acres of land. He has no downpayment to speak of but has a middle credit score of 625.
Now with a 625 score he can try for a mortgage with no income verifying as his stated income would be more than $5,000-$7,000 per month. He works for my company and earns $5,000 per month and he gets $2,000 between his retirement money and his ssn. I almost forgot to mention that he filed for bankruptcy almost seven years ago.
Now with that said the farm is in missiouri and he is in florida right now and intends to move onto the farm to make it his permant home.
the seller is selling the house and farm for $789,000
How much of a loan would my dad qualify for of this amount as the sellers may hold a second if need be so Im looking for numbers so that we can negoiate with the owners of the farm before we make a decision on which broker to use. And when we do we want a very experienced broker who can get things done.
Thanks
You are unlikely to find financing with little or nothing down. I would recommend talking to a local bank as they are usually the best route on farm loans.
Newbie,
Based on the numbers you provided in your posting your dad cannot afford this home even if you could find financing. His payment will be somewhere between 4500-5500 a month not including taxes and insurance. With the the income of 7000 a month he would be at a 68% back ratio before you add in any of his other debt payments per month, and certainly not including upkeep on a farm this size. You could possibly come on the loan as a non-occupant co-borrower to make this work, but you may want to rethink your options before putting your dad in this scenario. Hope this helps. Also, RJ was correct a local bank is about your only option. A national lender won’t touch 500 acres, especially if it is agricultural.
Ok i just got off the phone with the owner of the farm they will allow us to put down 250k and let us pay only 6% intrest which comes out to about $3k-5k per month.
Now how do we come up with 250k to make this happen lol we have some other freinds who are going to buy some of the land from us after we make the purchase but we need to make the purchase first.
So any creative ways to get ahold of 250k?
Have the seller refi and pull out as much cash as they can. Have them get an ARM option loan. Then have them place the property into a land trust and take over their payments “subject to”. This is just a simple explanation, but this method will not require a huge down payment and may be the only way to make it affordable. Best of luck to you.
Da Wiz
Ok wonder if this will work, we get the owner of the property to agree to sell my dad the house and say all the land to the road which is about 50 acres this will give the farmer $150,000 atleast for the downpayment he is asking and the farmer is going to take back a first on the land which is basically what he wanted anyways.
Yes we have to get a survey to split the land but it sounds like a way to get what we want and the farmer gets what he wants as well.
Now how hard can it be to get a owner occopied loan with a 625 stated income score? that should be easy enough to do as I have done them with less .
Not sure why I didnt think of this before now just have to pray the farmer agrees to let us subdivide the land this way and then find a lender to do this.
Any suggestions or complications anyone forsees?
If the land is zoned for ag. use you may run into a problem there.
So how in the heck does a person buy a home that happens to be on 50 acres dang just when I think that its all worked out somone throws another hurdle in the mix.
Any suggestions on how to buy a home on ag zoned land ?
local banks and agricultural lenders. there should be banks that do these types of loans in that area.