How much land do I want?

greybeard · Apr 25, 2017

The link doesn't work because it requires Google Account login.

I'm sure you all can understand why I'm not going to advertise our new address in a public forum.

I'm not much on privacy myself. I'm well known in the area, belong to several real world groups that require my real name used in public, and have had boatloads of visitors here at home in San Jac county and @ my previous residences from a couple different internet boards over the last 20 years. Have hosted shooting events and car shows that required me to post directions to my residence, so it would be kinda contrary for me to try to keep where I live a deep dark secret. I worry far more about using a debit card in town than I ever will posting information on an internet board.

Tho not an issue in this thread, since the state and area was posted in the opening thread, of all the approx dozen boards I frequent, BYH is undoubtedly the worst about people not putting a location in their profile. I can't count the number of times I've seen folks trying to help someone with a feed and forage related problem and the original poster wouldn't say what part of the world they lived in, which made it all but impossible for someone to help them. It has gotten somewhat better since Latestarter became a moderator and almost always reminds people to update their profile when he welcomes them to the board, but I still see lots of blanks where some sort of location should be.

Baymule · Apr 25, 2017

https://comptroller.texas.gov/taxes/ag-timber/

You'll want to apply for a agriculture sales tax exemption also. You can do it online and print out your cards. Anything you buy for the farm is sales tax exempt. Lowes and Tractor Supply both keep my info in their computer, when I make a purchase, I only have to give my phone number for them to look it up.

Latestarter · Apr 25, 2017

OK, just to reiterate... DO NOT INCLUDE anything regarding livestock, farming, production, farming equipment (tractors/balers/anything equipment that's farming related), anything along those lines in the purchase contract. If you do, you will get no VA loan. Either do a separate contract or let it be a handshake. Use a residential purchase contract and add in the necessary stuff that isn't included. Compare it to a farm and ranch contract if you're not sure. The key element is that title at the top of the purchase contract. That's what the paper pushers will see and fixate on.

Submit a letter to the lender with your application that you are buying the property as a rural residence with acreage, with the intention of possibly getting a few animals for personal use. AFTER you have closed on the property, you will contact the appraisal district and file for the Ag exemption. There's paperwork you'll need to fill out and submit. The fact that the land has/is already under Ag means you won't have to wait the five years. Once the loan is in place, the lender is NOT going to be chasing you down to find out what the classification of the property is. Make all your payments on time and you'll be fine and the lender won't care. Make sure if you pursue Ag Exemption that you will indeed do what is required to maintain it.

Instead of applying through a local establishment, you might want to seriously consider applying through one of the military credit unions. #1, their rate will be lower (by up to 1/2 a point) as they are NOT for profit organizations. The costs will be less, again, because they are not for profit. There are other benefits to doing a loan through a lender that YOU are part owner of. As a credit union member, you are a part owner in/of that CU. You don't own any part of a bank... they try to own YOU! I used Navy Federal Credit Union (twice) for VA loans and though I had headaches both times and not the best service (I was a mortgage broker and loan officer for many years), it was well worth the hassle in the end financially. I presently have a 3% interest rate, 30 yr fixed, no escrow. that I closed on this past November. The best rate any bank was offering with comparable fees/charges was 3.5% In addition, I had them NOT charge an origination fee of 1% and instead, charge a 1% discount point. Discount points are tax deductible, origination fees are not. You can also ask the lender to cover ALL other costs/fees with discount points to save even more via tax advantage. They don't care, they make the same money either way.

I know this sounds really complicated, but it isn't really... just keep the goal in mind and always remember that you are buying a RESIDENCE TO LIVE IN, NOT a farm to make a living. AFTER you own it, well, gosh, the circumstances are so good you just HAVE to take advantage of them... Then you can proceed accordingly.

greybeard · Apr 25, 2017

Baymule said:
https://comptroller.texas.gov/taxes/ag-timber/

You'll want to apply for a agriculture sales tax exemption also. You can do it online and print out your cards. Anything you buy for the farm is sales tax exempt. Lowes and Tractor Supply both keep my info in their computer, when I make a purchase, I only have to give my phone number for them to look it up.

That's the tax certificate I was talking about. In my county, you can't get farm plates without it. I've argued that it isn't the way the statute reds but they are adamant. What the statute really says is that you have to have an ag or timber exemption registration #.

Latestarter · Apr 26, 2017

Just did a quick look and here's what I'm seeing:

This from quicken loans: "30-year Fixed-Rate VA Loan: Rate is fixed. The payment on a $200,000, 30-year fixed-rate loan at 3.625% and 75% loan-to-value (LTV) is $912.11 with 2.375 Points due at closing. The Annual Percentage Rate (APR) is 3.929%." ( :ep

)

This from USAA (BANK!) They used to be military officer only auto insurance member only, and are now open to virtually everyone govt employed. They are NOT a CU - Member owned, though they make you think you're a "member" (for insurance you are). They are a bank and they are in it for profit. :rant

"30–Year 4.000% 4.281% APR See note 1"
Note 1: "APR calculations for a 30-year Fixed Purchase with a $225,000 loan amount is based on a 740 credit score, a single-family detached, owner-occupied primary residence located in Georgia with a lock period of 45 days, and a 20% down payment.
( :ep

)

US Bank (used to be excellent for 2nds.) Rate: 4.125% APR: 4.470% ( :ep

)

Here's from : http://www.mortgagecalculator.org/mortgage-rates/texas.php ( :ep

)

Here's from Navy Federal CU: 30 Yr VA Rate: 3.250% Discount points: .500 APR: 3.535% https://www.navyfederal.org/products-services/loans/mortgage/va-loans.php

Just so you know, I don't get any payoff or anything should you use any of these folks.

Just tryin' to help best I can. :old

LMK17 · Apr 28, 2017

Latestarter said:
OK, just to reiterate... DO NOT INCLUDE anything regarding livestock, farming, production, farming equipment (tractors/balers/anything equipment that's farming related), anything along those lines in the purchase contract. If you do, you will get no VA loan. Either do a separate contract or let it be a handshake. Use a residential purchase contract and add in the necessary stuff that isn't included. Compare it to a farm and ranch contract if you're not sure. The key element is that title at the top of the purchase contract. That's what the paper pushers will see and fixate on.

Submit a letter to the lender with your application that you are buying the property as a rural residence with acreage, with the intention of possibly getting a few animals for personal use. AFTER you have closed on the property, you will contact the appraisal district and file for the Ag exemption. There's paperwork you'll need to fill out and submit. The fact that the land has/is already under Ag means you won't have to wait the five years. Once the loan is in place, the lender is NOT going to be chasing you down to find out what the classification of the property is. Make all your payments on time and you'll be fine and the lender won't care. Make sure if you pursue Ag Exemption that you will indeed do what is required to maintain it.

Instead of applying through a local establishment, you might want to seriously consider applying through one of the military credit unions. #1, their rate will be lower (by up to 1/2 a point) as they are NOT for profit organizations. The costs will be less, again, because they are not for profit. There are other benefits to doing a loan through a lender that YOU are part owner of. As a credit union member, you are a part owner in/of that CU. You don't own any part of a bank... they try to own YOU! I used Navy Federal Credit Union (twice) for VA loans and though I had headaches both times and not the best service (I was a mortgage broker and loan officer for many years), it was well worth the hassle in the end financially. I presently have a 3% interest rate, 30 yr fixed, no escrow. that I closed on this past November. The best rate any bank was offering with comparable fees/charges was 3.5% In addition, I had them NOT charge an origination fee of 1% and instead, charge a 1% discount point. Discount points are tax deductible, origination fees are not. You can also ask the lender to cover ALL other costs/fees with discount points to save even more via tax advantage. They don't care, they make the same money either way.

I know this sounds really complicated, but it isn't really... just keep the goal in mind and always remember that you are buying a RESIDENCE TO LIVE IN, NOT a farm to make a living. AFTER you own it, well, gosh, the circumstances are so good you just HAVE to take advantage of them... Then you can proceed accordingly.

Thanks for the info! We still have NO contract signed.

The owner keeps needing questions answered regarding the VA loan process- he's not familiar with it, and he seems nervous. I'd like to get the contract signed ASAP, for obvious reasons, but I don't have any reason to believe that not having it signed yet is a huge issue. The owners are GREAT at communication, and we check in with one another at least daily. We are planning to meet this weekend to get the contract hammered out.

The owners' concerns are:
1) The VA won't fund the loan since it's a farm property. I think we have this pretty well ironed out. They're going to drop the Ag valuation after we get the contract executed. After closing, they're going to reinstate it, and then, of course, we'll apply in our own names for the 2018 calendar year. Seems that as long as the VA doesn't see that it's under Ag, they'll look at it as a rural, residential property. Plus, we're probably going to go with the Residential Contract. Seller prefers the Farm/Ranch one but says he doesn't really care either way.

2) The property will not appraise. I'm not super worried about this, though it's possible the sellers have info that I don't. Purchase price comes out to $236/sqft. Definitely on the HIGH end of the residential market, but on par with some other properties we've seen. Plus, the house is NICE. 12" thick exterior walls, 4 sides stone, well maintained metal roof, completely updated within the past 5 years, brand new geothermal HVAC and all new duct work, in-ground swimming pool + stone poolhouse w/bathroom. Other outbuildings include 2 pumphouses and a pole barn. AFAIK, the VA will take into consideration the upgrades to the house, the pool, the outbuildings, and the market value of the acreage. The seller's concern is that we're paying for some of the farming infrastructure that the VA won't take into consideration. Again, though, I *think* we'll be OK... Is a little nerve-wracking, though. We can make up some overage if the house doesn't appraise, but if the values are WAY off, it'll be a problem for us.

3) The VA non-allowable expenses will be high. I talked to the bank today and have some emails to forward to the seller. The only "unusual" non-allowable for a VA loan versus a Conventional is the pest inspection-- about $150.

True non-allowables aside, does anyone have any insight into which expenses are "typical" for a seller to pay? Survey costs? Any percentage of the closing costs? FWIW, we're offering full price and only concession is $8K in animals and equipment that they were going to try and sell. *We're not going to write the $8k into the contract, so as not to raise issues with the VA.

Latestarter said:
Just did a quick look and here's what I'm seeing:
...
Just so you know, I don't get any payoff or anything should you use any of these folks. Just tryin' to help best I can.

Again, thanks for the info! Without an executed contract, I can really only get estimates at this point, of course, but I've been quoted 3.875%, 30 yr fixed, with no fees and no points from Veterans' United, which seems to be the best so far for this particular mortgage. VU waives the origination fee for credit scores over 720, and they're not charging an appraisal fee because a friend referred us to them. USAA is saying 4.281% APR for 30 yrs with 0 points. I also called Navy FCU, but we'll need to call them back. The guy on the other end of the line had a way of speaking (think mushmouth) that was very difficult for me to understand. :hide

greybeard · Apr 28, 2017

When I sold some property in '15, the buyer's lender wanted a new survey. Previous survey was 5 years old. Told him if his bunch wanted a survey, it was on him--I wasn't going to pay for it, and didn't. ($$$$ wasted--new survey came up EXACTLY same as the 5 yr old survey)

Bruce · Apr 28, 2017

Quelle surprise @greybeard 5 years, sheesh.

Latestarter · Apr 28, 2017

Typically title companies want a "current survey, meaning less than 5 years. With a VA loan, typically a survey WILL be required. Who pays for it is determined by what is written in the contract. For a 20 acre property, you're looking at $3-5K depending. More if you want boundary stakes placed. If you have an older survey, you can call the company who did that survey and ask what they would charge to "re-issue/certify" it... much cheaper than having a new one done.

LMK17 said:
I've been quoted 3.875%, 30 yr fixed, with no fees and no points from Veterans' United, which seems to be the best so far for this particular mortgage. VU waives the origination fee for credit scores over 720, and they're not charging an appraisal fee because a friend referred us to them.

Not sure if NFCU will match what the other is doing but almost 3/4 point higher on the loan rate equals tens of thousands of dollars more over the 30 years of the loan. You did say you planned to put down roots there. The way NFCU works, if the rate is 3.25% with .5% discount, it would be 3.375 or 3.5% with no points. An appraisal is $400.00... peanuts compared to the higher rate over 30 years. Hope you find the ideal lender that works for you!

Reindeermama · May 4, 2017

We just closed on some property we sold. We paid of course, the real estate agent's commission, our portion of the taxes(county, school, city) for January thru May 3rd, owners title insurance closing fee to title company, and document preparation fee. We did not pay for the survey. Our's was only two years old, and wrote it into the contract that the buyer must pay if they wanted a new one. We paid only about $780.00 in closing costs.(not including the agent's commission) The survey would have been $2500. for the cabin and 5 acres. You can specify who will pay for what in the contract.

I found out up there in Real County, the new appraiser wants to raise the acreage amount to 30 acres to qualify for an exemption. Of course, I don't know if this will happen or not.

:frow

So happy for you to have found just what you are looking for!

How much land do I want?

greybeard

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