# Second Mortgage to Purchase a Property?



## John_Canada (Aug 17, 2013)

In our area the bank will only fund 55% of an empty property to build our homestead. Does anyone know if private lenders will loan the other 20% if we provide the 25%? Is this a typical thing still? The property we want to purchase the owners do not want to finance that second so we are stuck.


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## simi-steading (Sep 27, 2012)

Farm Credit... usually 25% down, and I think now probably around 5.5%... They will lend up to their appraised value. So you may get them to fund it all depending on the price.


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## tarbe (Apr 7, 2007)

I just contacted a small local bank in Gainesville, MO regarding the purchase of vacant land adjacent to my property.

They said they would finance up to 85%, and they would even use some of the existing owned acreage as the down payment of 15%.

Century Bank of the Ozarks.


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## Mike in Ohio (Oct 29, 2002)

Farm Credit doesn't operate in Canada.

Mike


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## simi-steading (Sep 27, 2012)

Oh.. sorry.. I missed the Canada part..


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## po boy (Jul 12, 2010)

John_Canada said:


> In our area the bank will only fund 55% of an empty property to build our homestead. Does anyone know if private lenders will loan the other 20% if we provide the 25%? Is this a typical thing still? The property we want to purchase the owners do not want to finance that second so we are stuck.


No............
Impossible to get a second on unimproved property.

Can you refi. your primary residence for the down payment?


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## John_Canada (Aug 17, 2013)

Thanks everyone. Poboy and Mike are correct but I did see a place around us called Farm Credit so will call them later. The problem is the banks will not loan over 75% of the value of our home which will give us the 25% easily but that still leaves the $20K we are short. We have started a land account (tax free) but will take some time to build up and unfortunately the price of land is rising faster than we can save. The subject property is 10 acres for $125K and that is realistically under priced by $50K because there is a nearby private airport and a dump about 2 miles kitty corner to it. Still looking into options including borrowing against our RRSPs but we did not want to do that except as an absolute last resort.

The biggest problem is getting the bank to finance the build while we hold the current house we are in. We are considering selling it and renting until we can save as much as possible before the build. Other option is to buy a current house with some land and build in the back of it over time. This would save the rent and about $16K in BS govt fees they call "redevelopment fees". However, not much land is usually available with these old farm houses. We are talking 1 acre versus 10. The search and finance figuring goes on.


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