For those that do, who have you financed through? What were the basic terms (ie down payment, loan period,...etc.). Have you ever pre-sold existing lumber to provide down payment? Curious if the experts here can help me start a plan to own my own piece of Alabama some day.

You can't sell timber you don't own. You might be able to talk to a timber buyer, get him to cruise the timber and give you a price he would pay for the timber after closing. Alabama Land Credit among others loan money for land purchases.

I would think most lenders would be comfortable with 20% down.
I don't see why you couldn't pre-sell the timber contingent on closing. Probably not a bad strategy if you are cash strapped. May make the lender nervous.

I'm about to close in a few weeks on some land. If your credit is real good you might get by with 15% down. If not goes up from there. The other thing to consider is that you need around 2k to 2.5k for closing. 1k is to join the credit union and when you pay off the land you will get the 1k back.

The way around the closing price is to get the seller to raise the price of the land to cover the closing price. This is what I done. Good luck on the land.

When I had my land, I had to ask my lender if I could cut the timber. There was no timber contingent in my loan that prevented me from doing it so I cut 30 acres. Some lenders won't let you cut the timber because they technically own it since they own the note. Or if you do, they require you to pay down the note with any proceeds from the timber sale. Make sure you clear that up before you close or before you cut.

Dr. B

IF you have enough equity in your home to cover the land purchase, consider a HELOC or other loan against your home. Land and Timber would be unencumbered by a loan, and timber sale would be non-issue, with proceeds applied to loan balance. Interest rate should be much less on home vs land loan. Interest would be tax deductible on home loan, whereas land loan would typically not be.

Consult a qualified Tax Accountant who can give you accurate advise based on YOUR complete financial situation. Discuss your plans with your banker, if you have one that is able to make local decisions and will be in position to work with your needs. Also, do all the financial research / planning before you find your desired piece of property, see what your borrowing limits are, and what your household budget will allow.

First south farm credit, you can put 20% down. 15 yr fixed 5.5 no balloon payment at the end. If you own land as long as the tax valve is equal to or greater than the down payment you can use it instead of cash. Once you pay the loan down they will release the property being used as collateral. I'm going through it right now on a 77 acre tract I'm looking to buy. I'm using a small tract I own as the down payment instead of cash. If you have any questions just pm me

What credit union did you find 15% at ? I like to know things like that just in case another opportunity comes up down the road. Everywhere I called has been 20-30% down. As of last week my credit score is a 790 so that's not an issue. You're closing cost are a lot higher than mine are going to be though.

First south farm credit. If you call they will all tell you at least 20%. But if you go talk to them you can get 15%. I use the one in oxford.

Thanks a lot for the info, I wonder if you can negotiate rate?

When I did this they would only loan money on raw land and payed a small dividend at the end of the year.

I've bought and sold several farms over the years. 15% down is pretty standard, but like the interest rate, it depends on your financial situation.

I would never allow a lender to put any type of contingency on my timber and I would never borrow against my home to buy land. That's just me.

May I ask why not? I had thought about doing that at one time.

Because life isn't perfect. Lose your job, fall off a ladder stand and all the fun and games are over and they come for your house.

I'd never do that either, ever.

Because I would not want to leverage my personal residence to finance recreational land. Losing a tract of land is one thing, losing your home is entirely different. The slight difference in interest rate is not enough to justify the additional risk to me. That being said, I know some that have done it and have had no problems whatsoever.

Looks like Remington and I posted at the same time!

Gotcha....the reason I was wanting to do it was to use home equity for the 20% down payment I was looking for.

Please don't do that Casey. Like others said you just never know. I've seen farmers and others do this and when the bank comes calling it's not good for anybody.

If your in a home you plan to live in the rest of your life and/or you have some equity, I see no problem at all borrowing against your home. Unless it makes your home payment go up beyond your means. 1000.00 house note is a 1000.00 house note, no matter what it's tied to it.

Let me put it to you this way....

If you fell on hard times would you rather lose your house or would you rather lose your hunting land? If your answer is your hunting land, use that for collateral. The payment amount is irrelevant. It's all about the risk.

I've seen people make huge financial mistakes by leveraging the equity in their home to finance all sorts of things. It's a really bad idea. If you don't have the money to pay the 15-20% down payment on a recreational tract, then you simply can not afford to buy it. Save your money and do it the right way.