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My current lender wont give me a refi, because the home sits on 15 acres rated A1(Ag). I have a 30

year Freddie product now at 5% for 580k, but now the bank wants me to go thru business finance, and they are quoting 5.75%.  Any advice?
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January 07 2011 - US
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If your current mortgage is a 30 year fixed, there is no way to justify a refinance. I'd be thankful for what I have.

Happy funding, Rudi
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January 07 2011

Your situation is common for Oklahoma. If your home + 5 acres will hold the value of what you owe on your mortgage, separate it from the other 10 acres. The home & 5 acres will be rated R1 and the other 10 rated A1, with separate deeds. If you need the $ instead of the land, sell or put the A1 10 up for collateral. However, 5% on $580k is really good. Will the refi justify a positive result after your typical refi cost?

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January 07 2011
You have a competitive rate for that loan amount and acreage.  You more than likely will not do better unless you are willing to pay points.  Are you in need of cash out or are you just trying to lower your monthly mortgage payment? 
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January 07 2011
Generally speaking, convetional guidelines don't like the property itself to exceed 25-30% of the total value of the whole.  This has been the norm forever.  The only exception is when a large lot is the standard for the area.  A large amount of acreage has never been acceptable.  In these cases a subdivision of the land may help.  I have seen where the landowner was able to subdivide a small protion of the land where the dwelling sits.  This makes it easier to finance with a traditional loan.  The problem with this is, there must be comparable sales of home like yours with the same  property size for an acceptable appraisal. 
 
Large farm land and homes can be financed through the Federal Home Loan Bank programs.    
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January 07 2011
5% on $580K is a gift. Right now the going rate for a non-jumbo is about 4.875%. My advice is to not worry about rates as they most likely will not go down low enough for a refi to be worth while to you.
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January 07 2011
I would suggest you try a lender who does loans for the farming community. They usually understand and have recent comps for that type oof property. I dont know where your property is located but in our rural area of Southern Maryland we have a company called Colonial Farm Credit and they could do a loan like that. Hope is helps. Gail Nyman, Re/Max United
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January 07 2011
 
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