Land equity loan recommendations

[Backwoods101]

I'm looking to borrow against my land in order to invest in more raw land. Any and all feedback or recommendations would be greatly appreciated. From what I have gathered so far is I can only expect a lender to loan @ 35% of my lands value.

[Uncle Saggy]

Be prepared to talk to several lenders. I have no advice to offer but remember a guy I work with doing this a few years back. He was wanting to use his vacant 40 acres to buy an adjoining 10 that was up for sale. He ended up getting it done


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[captainsling]

I would talk to Capital Farm Credit, or several small town banks.

[toledo]

Might try prosperity bank.

[Backwoods101]

Has anyone got an equity loan against land? Is the 35% correct? On a home they will give you up to 80% of its value...that's a huge difference.

[Codie]

Has anyone got an equity loan against land? Is the 35% correct? On a home they will give you up to 80% of its value...that's a huge difference.

Different banks will have different max LTV % that they are willing to lend on land depending on if it is ag land, raw land, recreational land, ect.ect. IF this land is part of your homestead according to Texas Homestead Law then 80% is the max equity you may pull from it as long as your particular type of land qualifies for 80% LTV through your lender. Nobody can give you a straight answer if they do not know where your primary residence is as your primary residence will determine what is/isn't considered your homestead in accordance with the Texas Homestead Laws

[Backwoods101]

someone doesn't know what they are talking about or you mis-understood what they were telling you. Different banks will have different max LTV % that they are willing to lend on land depending on if it is ag land, raw land, recreational land, ect.ect. IF this land is part of your homestead according to Texas Homestead Law then 80% is the max equity you may pull from it as long as your particular type of land qualifies for 80% LTV through your lender

It is not part of my homestead.
I thought the 35% sounded ridiculously low and it came from a google search so I had my doubts.


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[Codie]

It is not part of my homestead.
I thought the 35% sounded ridiculously low and it came from a google search so I had my doubts.


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According to you or according to Texas Homestead Law? Most people think just because they don't live there that it is not part of their Texas Homestead and that is not true. Not saying you are incorrect, just making sure you understand that knowing what your Texas Homestead is ACCORDING TO TEXAS HOMESTEAD LAW is important when you start doing any kind of cash out borrowing. If you are married the first 200 acres that you own in the state of Texas is considered your rural homestead (whether there is a house on it or not) and would be subject to 80% max equity. If your primary residence is in the city limits and serviced by multiple municipality utilities, that home can be counted as your urban homestead and your additional land in not considered homestead at all.

[KactusKiller]

Listen to this man^^ Codie knows what he is talking about.

[Backwoods101]

According to you or according to Texas Homestead Law? Most people think just because they don't live there that it is not part of their Texas Homestead and that is not true. Not saying you are incorrect, just making sure you understand that knowing what your Texas Homestead is ACCORDING TO TEXAS HOMESTEAD LAW is important when you start doing any kind of cash out borrowing. If you are married the first 200 acres that you own in the state of Texas is considered your rural homestead (whether there is a house on it or not) and would be subject to 80% max equity. If your primary residence is in the city limits and serviced by multiple municipality utilities, that home can be counted as your urban homestead and your additional land in not considered homestead at all.

That's good stuff! I definitely fall under the 200 acre mark lol. Thank you sir [emoji106]


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[kch73]

What do they use the value of land? County appraisal? Private appraisal?

[Codie]

What do they use the value of land? County appraisal? Private appraisal?

typically the lender will order a new appraisal

[Backwoods101]

. Nobody can give you a straight answer if they do not know where your primary residence is as your primary residence will determine what is/isn't considered your homestead in accordance with the Texas Homestead Laws

My primary residence is in Fort Bend county. The land I'm wanting to borrow against is in Gillespie county so they are about 4-5 hours away

[Codie]

My primary residence is in Fort Bend county. The land I'm wanting to borrow against is in Gillespie county so they are about 4-5 hours away

is your Fort Bend county residence in the city limits or outside of town?

[Backwoods101]

Outside of town


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