What do you think of buying a 12-acre parcel of land; not to build on, but just to have?

For the record, I am not a home owner. I rent an apartment.

I do not make much money, only about 30K a year. I do not

feel emotionally prepared to buy a house right now. However,

I would like to buy a parcel of land outside of town, something to call my own, and possibly someday build on. If nothing else, just keep it and hold on to it, and always know it's there. The asking price of the parcel is $88,000. I could get lost in 10 acres of land. The payments wouldn't be that high on 88,000 assuming a 15 year mortgage, so I could afford both the land payment, and my apartment rent. Are there any special considerations when it comes to buying land? Are banks less willing to make loans for land? Any info you could share would be much appreciated.

It is a good idea my friend, but there are some considerations that you need to take into consideration.

1. Is the land in a good location? (not beside a coal power plant, or something undesirable)

2. Is the soil suitable for a well and septic tank? (this is a test they do when they dig holes in various locations to see if the water drains properly)

3 Are there trees on the property? - big enough trees can bring in some needed dollars.

4 Will the land need to have significant changes made? (Bull Dozing and further grading is expensive work.. I do that work off and on. can get up to 150 dollars per hour!)

5 Is the property residential? - make sure the property is zoned correctly for what you are planning on using it for.

6 are there any land restrictions? some areas of land have restrictions such as ( no trailers, modular homes, chicken coops, junk cars, etc...) this can be foud out at the register of deeds office.

7 Is there a claim, or second mortgage on the property? Make sure that you are not buying someone elses problems, it is possible to buy property and get burned with an unsettled mortgage that the previous owner "forgot" to tell you about. you can find out if there are any claims by paying a lawyer to find out, or if you are knowledgeable go to the clerk of courts office. They should have a computer set up so that you can check for claims on the property.

these are just a few things that i would suggest you think about.

The land will most likely appreciate in value as well, as the world is getting more filled with people. You will have something that everyone needs, and that is a good investment to have.

I wish you the most of success!

Go for it. It used to be that they would not borrow on raw land, not any more. The rule is buy real estate and wait, not wait and buy real estate. You have already talked yourself into it, now get off your duff and do it. Loans are at good rates now. Make sure you have utilities, and that it perks. If you can, get it contract for deed.

What ever reason you decide on purchasing the land or not.

Please do your due diligence on the property.

Be sure it is build able. How close are the utilities to the property.

Be sure you use a reputable real estate agent to make the deal in your favor.

The price of the land may at this time be worth less due to the current market trends.

Besides the down payment you would be required to put down.

This is a larger than normal down payment as it is not livable as a home would be.

You will be paying higher interest rates as it is being purchased as an investment property.

Best of luck in your adventure

Loans for land are hard to find and if you find one, it is usually a maximum of 50 percent of the value.

Instead of buying land that will not give you any income, invest what you would be making in payments in some kind of investment that will give you a good return.

I would be very sure about the price you are paying for land right now. Land typically appreciates in value slower than developed property. And in a lot of places, the value of land is greatly inflated due to the recent real estate bubble that is slowly popping. You may buy it at $88K, which seems like a great price. However, if the value was inflated, then it may lose quite a bit of value before this real estate recession is over.

On the bright side, a large chunk of land like that allows you freedom to do a number of things with later on. Check with your local planning and development board and make sure there are no restrictions to a. build on it, b. subdivide it, and c. rezone it to something valuable (like commercial, or residential).

Also, just because you can afford it, doesn't mean you should buy it. A lot of people are in trouble right now because they bought property that they technically could afford. Sure, they were living expenses and bills equaled about 95-100% of their income, and they were constantly living on the verge of distaster - but technically they could afford it. Most experts agree that we should live around 65% of our income, and put the rest towards investments, and savings.

Find out how much the taxes would be. If you are just buying the land to have it might just be better to save some money up and not have to pay taxes on land you aren't going to use.

Raw, unimproved land is known as "An Alligator".

Your land will eat money - LOTS of money. YOUR MONEY.

Zoning officials and county officials COULD OR MAY change the zoning and other lot requirements of your land on a regular basis.

UNLESS you are going to build OR get the land sub-divided into approved building lots A.S.A.P., you could be buying a "pig in a poke."

Thanks for asking your Q! I enjoyed answering it!

VTY,

Ron Berue

Yes, that is my real last name!

I need help understanding a bank loan!!!?

What is a "5 year ballon based on 15 year amortization" (at 8%) loan? We are buying land and this is what the bank is offering. I don't understand it. Please help!

Your loan has a base interest rate of 8%, your monthly payments are based on a 15 year amortization, however the loan comes due in 5 years. The balloon payment is due in 5 years. Generally the lender will renegotiate a new loan at the prevailing interest rate.

Example: Loan amount $25,000

Interest Rate 8%

Monthly Payment based on 15 year amortization $238.91

At the end of 5 years, your loan balance will be $19,798.49. You will have made 59 pmts of $238.91 for a total payment of $14,095.69 of which $5,201.51 is principal and $8,894.18 is interest.

You will then negotiate the repayment of the remaining balance of $19,798.49.

Good luck with your purchase

Go 2 a website name www.home and office loans.com

I don't understand everything but I do know that with a balloon loand you start off small then it increases over the years. I just don't know how often it does and how much.

well, a balloon is usually a lum sum, large payment so I'd ask them about it. Amortize means to liquidate a loan. I'm not sure it sounds like a good offer. Better check it out.

you pay so much each month up to a point. then you pay a HUGE amount (perhaps the loan balance).

Your banking representatives should be willing to explain this until you understand it. Don't feel intimidated. Go ask questions until you understand it.

I would urge you to understand that loan before you even think about signing the contract.

yes i have some tips which might explain it

Before U understand the loan, understand Money: The Money(m2) that Money(m1) makes, makes the money(m3) that money(??) makes_____this is the basic Capitalist Idea.

You better ask the Banker what it means, rather than getting an interpretation by someone here & save your A** !!

also try www.bankrate.com

For 5 years you will be paying off mosly the interest only. Almost 90-95% of your monthly payments go towards the interest.

Then after 5 years you would be paying off interest and principal

I was going to answer, but dale hit the nail on the head. You will have the payments of a 15 year loan, but the note will come due in 5 years. After 5 years, you will be required to pay the remaining balance or refinance it (usually into a construction loan at that time). This is how we usually structure our lot loans.

your loan is for 15 years but only a five year term

after 5 years you have to renew loan and it may be different interest rate or different length of time every time it is renewed

Will the banks be closed tomorrow since the 4th will land on a saturday?

No. The banks will be OPEN tomorrow and CLOSED on Saturday, which is the actual holiday.

How to transfer land title (deed)?

To make the money transfer is secure, it is better to do by bank transfer.

Then the land title/deed transfer is through a "government office"? if yes, which government office?

Pay an Atty to properly handle this instead of goofing it up.

Bank removed their charge from my house uk?

3 years ago I received through the post my deeds for my house and a letter saying that the bank had removed their charge from my house as my mortgage had been paid? I then received a copy of the Land reg for the new entry showing title deed in my name with no charge? I stupidly spoke with the bank and told them that they had made a mistake but they said their was no mistake. I continue to pay the mortgage but what does this mean? Any help would be great. Thank you

Well, at the moment you could potentially sell the house and scarper with the proceeds. However this would be immoral.

You need to go back to your bank. Make a proper appointment to speak to a mortgage adviser and take all copies of mortgage statements that you have.

Also, take the copy of your register and show them that the charge has been removed.

Get the bank to agree the balance remaining on the mortgage. And draw up a new mortgage deed and get it properly registered.

But don't pay any arrangement fees or survey fees of course.

It's better to be totally transparent and honest.

get in touch with a solicitor that's the only advice i can give you

You say you are still paying the bank money but, if they say there is no charge then ask them where is cash is going ...or simply stop paying and see what reaction you get from the bank.

Best loan tht can be availed for purchase of land.?

I am planning to buy some land for constructing an house, and can u pls guide which banks provide good rate of interest. I have a total work ex of one year,,is tht a constraint..

pls advice

better for your is go to bank and study their loan schmes

Not a very good one. You'll likely need a huge downpayment...40% is not uncommon. Call your bank, then use a calculator.

Great post! I completely understand your question. Money is hard for a lot of people right now since the enconomy is going down. My friend told me about this website of an organization that gives people up to $1500 towards their rent or mortgage. It's available in most areas, so I think you should check it out.

http://www.renters-mortgage-assistance.org

Hope this helps!

Is it halal to get a loan from the bank to build a house although aleady have one.?

I Salamou Aleikoum

I already live in my own small house.My wife has got a peice of land.We want to build a bigger one.Because of the high expenses we thought of resorting to bank loan which should be paid back in six years puls the intrest.I think there is nothing wrong with intereststs because the value of money is not the same = 1 dollar in 2006 isn't the same in 2012.Am I right ? or isit another form of RIBAA? Thanks in avance. (I am Tunisian)

hmm actually its not halal to get a bank loan period. This is because they deal with interest

ugh, i read it somewhere, cant believe i forgot the site, hmm if you email me i can get it for you .. but nywho, it said that you should not buy a house on mortgage because it is a loan, and the bank does business with interest. Interest -- taking it and giving it is harraam.

If I find the site I will get back to you, If I dont get back to you, I have probably forgotten, and you will need to email me ..lol

it is OK, go ahead and do it.

Don't know what halal is?, but getting a loan from the bank is okay. Check out www.daveramsey.com for future financial cocerns.

Why don't you consult your sheikh?

As far as I know, going to a bank for a loan is haram in the first place.

You aren't really supposed to according to most Islamic scholars.

However, when somebody sells you something, you pay for it. Paying interest is paying for a service.

Don't worry about the little things like that. Help the poor and the needy, treat your family well and thank God for what you have been given. Live life by kindness.

Wa Alaikum Mas Salaamu Warahmatu Allah Wabarkatu,

It is Riba because the definition of Riba is many, but the one you speak of is when someone puts conditions on paying back money borrowed, It would be different for example if you borrowed money and they said "OK we will help you build this house for a fee" and the fee is an upfront fee, but if the conditions state that if your late or if you pay off early there is a fine then this would fall under the haram acts of Ribaa, and Allah sobhana wa tala knows best.

BUT There are many many islamic NON Ribaa organizations that might help you. I do not know about Tunisia but in America one that comes to my mind is LaRiba (not sure about the spelling) Try to do a search on the internet and insha Allah you will find another way without having to pay Riba. Riba is intrest in any form as well.

If you need more info on Riba and the meaning email me and I will be happy to send you some good links on it.

Pray that helps

fe aman Allah

as salaamu alaikum warahmatu Allah wabarakatu,

Okti

walycom salaam bro ..i think you are doing this for your family and its not haram to do so .. banks have job to lend money and in return they charge intrest .. thats business ,i dont think its haram to borrow money to buy house , cos the value of the house goes up in 6 years time .. wish you good luck .. salam alicom wa rakhmat ullay wa barakato