Next year possibly, I may be looking to buy my first piece of land. I have a few questions that i was wondering if someone on here can help me with.

1. is the overall process similar to buying a house?
2. i have EXCELLENT credit, but have heard that securing loans for land are much harder. is this true? what can i expect for a good interest rate?
3. does the land have to be insured, if there are no structures on it? i mean, like monthly insurance?
4. any other info on the process would be great!

Harder than buying a house. A down payment of about 20% is normal, and the loan is usually only for 10 years. I went through the Texas Veterans Land Board, and they require 5% down and 30 year loan. But every bank I tried was 20% and 10 years.

Insurance is not required that I am aware of, but is cheap and I think necessary.

i figured the texas vet's land board would be my best bet. i was unaware of the 10 year land loan at most places... thanks for that info.

if you don't mind me asking, what was your interest rate? on the land board website, it shows over 7%. that seems way high to me.

Yeah, 7%. It sucks, but what else are you going to do. I could not afford the 10 year option. The 20% was no big deal, but the 10 years was not enough. The banks did not beat the 7% by much, you will not get a great interest rate on land. My credit score is over 800 and that is the best I could do.

yeah, i guess that's not bad.

after further reading though, i see that they will only finance up to 80k. that kinda sucks. i found a nice piece of property like 10 miles from my house for 155k. 85 acres. electric, water, already on site. but now it's out of my reach...darnit!

You might check with Texas Land Bank....I got my loan thru them...like Helo said interest rates are poor at best. One good thing about them is they have dividens that they pay each year back to stockholders, my payment last year was over $1700, in addition they hold some interest money on account and after 5 years either pay it to you or apply it to principal....long story short, I they pay back dropped interest rate about 1.5%...good luck

Through Texas Land Bank you can get a 20% down with 25 years. Going rate is about 7% to 7.5%.

great thread for all of us potential land buyers. Keep the good info coming guys! Are there any other unforseen costs that a new landowner should be aware of? I hope to purchase a small piece of land within the next year or two.

Taxes, try to get some kind of exemption. I have the veterans exemption, homestead, and pine exemption.

How much of a tax brake does an ag exemption actually get you?

All my exemptions lower my taxable value from 1100 an acre to 100 an acre.

That is great to know. Thanks Helo. I am hoping to purchase a place in the woods next year sometime.

Your welcome, I am sure there are folks on here that know a lot more about this than me. I only know what I have run across.

TONS! The place I hunt on now is about 300 acres and the taxes are $350 a year. If it is not in AG exempt or some other exempt status currently the process can take up to 3 years to establish the exemption. So it is critical to look at that when purchasing a property.
Other things are electric and water. Just because they are right on the road by your place doesn't mean it will be cheap or that you can tap into it. I know of a place that has electric by the road and it will cost a bit to get it to extend to where it is needed and there is water lines on the road. The kicker is that the water lines are loaded so until they upgrade the system no one else can tie into them. So that means a well if you want water. It's the little things like that will spike your costs once you buy if you don't do your homework.

Hunter_Man.....If you are in San Angelo, you need to check out Crockett National Bank. They do quite a bit of financing for people we sell land to (big and small tracts).

capital farm credit is who i used.
20% down with a 20 yr note.

rates will be higher than with a home loan since they are not tied to the same things on the back end. (how the banks borrow)

Capital Farm Credit does the dividend thing too.

you will want to think about things like tanks if it does not have one too.

we are on wildlife exemption (a form of ag exemption that does not require livestock) my taxes are just over $1 an acre.

Check with an appraiser first on the place you are looking at. Bank is going to go by what they think it is worth in many cases. I sent a place near where I hunt to an appraiser and he came in at 70% of the list value due to no improvements and other sales which can be hard to come by now. Said the bank would not do a loan for it unless you only took a loan out for 80% of the appraisal meaning your down payment would be giant. Maybe that is why it has been for sale for 3 years.

This is a great thread

I'm surprised at the number or people that don't know about the wildlife exemption. It gets you pretty much the same tax break as the ag exemption.

Almost any property that you somewhat manage will qualify. Ask your appraisal district about it.

Basically you have to do 3 of 7 management practices. Supplying suplemental food sorces, Supplying water and taking game surveys should do the trick.

I've seen some people add this exemption to their prperty when they get tired of messing with cattle to keep their ag exemption.

and it satisfies all the habitat managment needs for an MLD permit program if you choose to try MLD

I don't have land but have run into this in the past.
Easement's or possible easments
Windmills, mineral rights, etc
Is your neighbor going to fence you out

I did my deal in May/June....Lone Star Ag Credit...20 year amortization, fixed for 5 years @ 5.85%, and I put about 30% down. My plan is to have about 40% of it paid down by that 5th year, and then deal with refinancing it then or re-amortizing the loan.

Enjoyed dealing with the Lone Star crew out of New Boston.

You must have an AG exemption before you can convert to a Wildlife Exemption. It takes 5 years to build an AG history if the land you are buying does not have an AG exemption so be sure and check the records at the County Appraisal District office.

So is a 25 year with 20% down @ 7.5% about the best out there right now. Looking at some land right now to close within 60 days.

YOu can go lower, but it would likely be a variable rate loan.