Land Financial Tools
Financing your land is similar to financing other real estate. Alternatives include local banks, specialty land financing firms, credit unions and, sometimes, the seller.
Banks interested in financing land purchases include the following but, check with your own bank, too:
The following financial institutions make loans for land purchases. Follow the links or call them for additional information.
AgStar Financial Services
Toll-Free: 1-866-577-1831
Rich Miska
Boundary Waters Community Bank
601 East Sheridan Street, Ely MN 55731
Toll-Free: 1-877-365-6181
Deerwood Bank
14986 Lynwood Drive, PO Box 2748 Baxter MN 56425
218-825-8946
Mid Minnesota Federal Credit Union
200 South 6th St., .PO Box 309, Brainerd MN 56401
218-829-0371
Linda Proctor
Northview Bank
PO Box 2572203 Finland Ave, Finlayson, MN 55735
http://www.northviewbank.com/sub.asp?pg=vacation
Toll-Free: 1-800-450-7575
Woodland National Bank
Onamia 1-888-532-4142
Hinkley, 1-877-406-9234
Sturgeon Lake, 1-218-372-3105
Cloquet, 1-218-878-5999
Stearns Bank Holdingford NA
580 Main Street
Holdingford, MN 56340
320-1-746-2261
Jeremy Goltz
Isaac Flenner
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Seller financing. Some sellers are willing to finance the purchase of land for the buyer. In Minnesota, there are two primary tools used for seller financing, the Contract for Deed and the Purchase Money Mortgage. Both of these instruments provide for the terms of the purchase and repayment of the principal amount and interest.
Why would a seller finance the sale? The seller is intimately familiar with the land that's being sold. If the seller doesn't need the total funds from the sale immediately, financing the sale of the land can provide a better return than some other investments and the seller is comfortable with the collateral for the loan - the land they sold.
What are typical seller financed terms? Typically, a seller will require a down payment in the 15% to 25% range. Interest rates today run approximately 7% to 10% and the repayment amortization is ten to twenty years. Generally, you can expect a balloon payment to be due in 3 to 5 years.
- Example.
Purchase Price$100,000Down Payment$20,000Balance by Seller Financing$80,000Interest Rate9%Amortization Term20 yearsMonthly Payment$719.78Balloon Payment Term5 Years (60 Months)Balloon Payment Amount$70,965.64
Loan Payment Calculator. Click here to calculate the monthly payment for a loan.
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