Financing Land purchase

Hello all. I would appreciate some advice on the following..I would like to buy a few acres of land which i will be renting/have an existing tenant. The income will be pretty small but so too will the price(agricultural land value) Im not sure how best to finance it? Or what type of loan one would get? I could purchase from savings and a personal loan but a personal loan for this would probably be 9/10% and would be a very expensive way to buy it? I would need a loan of about 50/60% of the value of the land.

Moved from Mortgages and Buying and Selling Homes.

Sorry about that should have known by now ...would like it known that i did ponder its location for a few minutes and did searches for relevant threads

It would be a commercial loan, similar to a home mortgage, rate higher. However you should be able to negotiate a rate much better than 9/10%. I'd think that you could get somewhere between 5 to 6%? Ask a few banks in the area- even better if you have a good relationship with one bank, ask for their best rate. If not happy, shop around. Sometimes commercial loans have an arrangement fee too so be sure to ask for that to be waived.

Thanks vanilla. Would the loan be based on personal income or investment income from the land and ability to repay? If there is a broker out there i would really appreciate some advice before i go to a bank or if i could use a broker to arrange it would be great.

I'd imagine the loan would be based on both personal and income from the land. You don't need a broker for this, just do a little leg work yourself. If you really want to get a broker be aware that they may charge an additional fee- although sometimes they get a commission from the bank so it will cost you nothing. Also try to get a broker who comes recommended. I have seen some very good brokers and I have seen some poor ones.

Hi there,

I purchased land last year about 3 acres with a lot of road frontage with the intention of building on it. I took out a mortgage though with PTSB. I didn't have planning on it at the time. I have a house so part of the loan was equity based and there was a cross charge on the land. I would approach a few of the banks and ask for a mortage on it rather than paying commercial rates. Worth a try!

Angela59

Thanks Angela, that might be just what i need. That would be the best way for me to do it anyway. The land i intend to purchase is just like that.