Financing Hunting Land

There are three typical methods of paying for a hunting land purchase: Cash, Conventional Financing, and Contract for Deed. This article will focus on conventional financing, its pros and cons, and your options for obtaining a mortgage.

Conventional financing is more commonly referred to as a mortgage. A financial institution such as a bank or credit union lends you the money to purchase the property. In exchange the property is put up as collateral to secure the loan.

Mortgage financing is extremely common with homes, however you may find that your bank will not lend you money for land that will be used for hunting only.  This is because most banks want to see a house on the property which will ensure the bank will get their money back should the borrower default and the property goes into foreclosure.  They are unfamiliar with recreational property and the concept of lending on vacant land which will only be used for hunting does not fit into their underwriting criteria.

So what is a hunter to do?  Fortunately there are a handful of mortgage lenders out there that will lend on hunting land.  They do understand the value of recreational property and have programs specifically tailored to Minnesota hunters.  Contact me for information on these lenders.

Expect to put down 20% to obtain a conventional mortgage, although some lenders may be able to lend with a smaller down payment.  Likewise, loan terms of 10, 15, 20, and 25 years are common with some variation on programs between lenders.

Financing your hunting land purchase does add some extra steps to the process, because of this it is important to decide if financing your purchase is right for you early.  When you decide the time is right to buy land, contact a lender and become pre-qualified before you start walking properties.  By completing this crucial step first, you will know how much money you can spend and you will be ready to submit an offer when you find the perfect piece of land.