21 Mar How does financing work with acreage?
My boyfriend and I would love to live on acreage but heard that banks don’t care much about the acreage. Could you explain this to me or do you know what I’m referring to?
When it comes to purchasing acreage, whether for agricultural use, recreational purposes, or building your dream home, understanding how financing works is crucial. Unlike traditional residential properties, acreage transactions involve unique considerations and financing options.
If, for example, you bought a hundred-acre property with just a home, the bank will typically appraise it only with five acres. They will say, “Hey, what is this home worth if it only had five acres?” and let’s just say it’s $200,000 less than the purchase price that you have paid. The bank will then say, “Hey, give me your deposit whatever you’re planning on paying your down payment plus this extra $200,000 which most people don’t have so then they use your backup because of financing.
Here’s a comprehensive guide to help you navigate the financing process for acreage:
