I purchased a house + buildings on 50 acres 5 years ago and had to take an ARM because they said there was too much land with the house to get a fixed rate mortgage. At the time, the rate wasn't bad. Now, I am paying over 8.5% and looking into getting a fixed rate mortgage. The local banks are telling me that I have to get an adjustable rate due to the amount of land with the property.
Are there any exceptions to this rule in the mortgage industry? If so, where can I shop for a fixed rate mortgage on Ag zoned property?
2006-11-24 08:13:33 · 7 answers · asked by Tammie R 2 in Business & Finance ➔ Renting & Real Estate
Not at all. Many factors come into play when obtaining a mortgage. Call your local bank and ask for a loan officer. They will be happy to answer your questions, if not keep looking. You should be able to get almost any loan you want on any property. ARM's do offer bigger incentives for the bank or loan professional you are using, they may try to steer you there. Make sure to ask around with other financial institutions.
From my experience 5 acres and under are quite easy and fall into residential. However, if any of the land is used for profit from a farm type business (crops, animals, etc) the lending rules change fast.
2006-11-24 10:46:30 · answer #1 · answered by JCBahr 2 · 0⤊ 0⤋
Hi Tammie. I'm a mortgage banker and when I read your question all I could do was shake my head. Some brokers and lenders will tell you anything to get you to go along with programs that best benefit themselves.
5 years ago the rate difference between an ARM and a fixed rate was substantial and in the short term you certainly could have benefited from the ARM, providing that whoever sold you the loan gave you the rate you deserved. Now that your fixed period has expired your rate is changing with the market.
The lender who told you that your were required to purchase an ARM was definitely lying to you and shame on them for deceiving you. The truth is that they were being paid more for selling you the ARM. The reason for this is because of exactly what's happening to you now. The bank is making more money from the loan as the rate adjusts upwards.
Given the real estate boom over the past few years I'm sure you've accumulated enough equity on the property to qualify for a much lower interest rate than you even started with. It definitely makes sense for you to refinance into a fixed loan product.
If you would like to talk with me more please feel free to email me and I will answer any additional questions and help you find something that makes sense for your situation.
2006-11-24 14:29:10 · answer #2 · answered by Chris S 1 · 0⤊ 0⤋
You cannot predict the future market. There is nothing to say that you will be able to sell in 2-3 years. We may still have an abundance of homes or have a buyers market then too. Make your plans today based on what you are capable of today. If you can get a fixed and make the payments I would go with that rather than 'hedge' my future on whether or not I will be able to sell when this next arm comes due. Plus if your credit and value in the home does not improve along the way.......there are even less guarantees for future refinance. Many people took loans that 'felt' good because the payments were cheap, but their plan to just Refi was thwarted when values started to drop and foreclosures became more available. What made them think they had a guarantee of continued increasing value? Now they are in foreclosure because they cant refi or sell. You're smart for asking a 3rd party because some loan agents don't give you the bad news for fear you'll go elsewhere and or that if you choose a fixed they'll get less $. Good Luck
2016-05-22 22:55:16 · answer #3 · answered by Anonymous · 0⤊ 0⤋
They're probably saying you need an ARM because they have to outsource the loan to another company/investor, who happens to only offer ARM products for your particular loan scenario.
I'm sure you could get a variety of diffferent typical loan programs, including a fixed product. The only thing I could you not being able to get would be an option-arm, but basic programs should be offered to you.
Learn about credit, finance, and mortgage at:
http://www.thetruthaboutmortgage.com
2006-11-24 08:17:32 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Hello, I sent you an email on your question. There are fixed rate options available. Feel free to contact me with any questions.
Anthony
lowermydebtnow@yahoo.com
2006-11-24 09:40:53 · answer #5 · answered by lowermydebtnow.com 2 · 0⤊ 0⤋
There are no rules in motgage financing. While it may be too late now, with diligent shopping, you could have have the loan of your dreams.
-MM
2006-11-24 08:56:41 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Sure, just shop around.
2006-11-24 08:17:44 · answer #7 · answered by Bostonian In MO 7 · 0⤊ 0⤋