STx
Veteran Member
- Joined
- Oct 13, 2014
- Messages
- 1,132
- Location
- Bandera, Tx
- Tractor
- New Holland TC40 DA, Deere 17D, Hyster SX50 forklift, Case D450, Kubota ZD1011-54, International Dump Truck, Kubota SVL-952S, Volovo EC250DL
Puffy, what you say lines up with my thinking. We could finance without a loan but a loan made sense because of the interest rates right now, and because I am 77 and want to protect funds for my wife when I am gone, because I want our daughter and SIL to be a bit more directly involved in the finances, and finally - and this is important - we have another daughter and we have always managed things fairly between them- I told the home building daughter that whatever we 'give' them I have to find a way to impart similar value in some way to the other. They understand this. So, in a way, if we use savings for this build, it costs us twice as much as we have to give the same amount, at some time and in some way to the other daughter.
We have always been willing to help, as both daughters have turned out really well, they both worked two jobs during college, have always found jobs on their own, and mostly paid their own way. After college we told them we would pay their car insurance and cell phone bills for six months and they had to take it over then. Same with other things. It has worked out well. We also gave them each $500 into a Vanguard account at HS graduation, explained investing, and how contributing would build that up. They have contributed over the years and now, they each have over $60,000 in those accounts - part of their current savings.
Your age is probably causing part of your problem with lenders, unless you're looking for a very short term loan. At a certain point, they worry you won't live long enough to pay the loan back.
If you're going to use larger acreage as the collateral, you need to go to a farm credit lender, they're usually cooperatives of some sort where you have to be a member. We bought our 190 acres using Texas Farm Credit, they have different versions of that in most states, here's Ca - California. Search for "California Farm Credit" or farm credit for your county in Google and you should find more.
The appraisal on our 190 acres was $1800 and it took about 8 weeks to get it done last summer. Ag appraisals are different than a typical subdivision lot appraisal, it requires different skills to value undeveloped land.
I know you've said you didn't want to do this but, the fastest/easiest way to handle this is probably going to be to split an acre out and just give it to your daughter and then let her go get her own construction loan. There are construction loans that will convert to a regular mortgage once the house is complete and you have a certificate of occupancy (if required by your jurisdiction). Their age and the smaller parcel is going to be more attractive to lenders and you're not going to need the appraisal since the loan is for the build and paid in draws as it's completed, instead of based on the value of something that already exists. You can always co-sign for them if it's needed.