Fresh air, room to roam, privacy and proximity to nature – for many, buying a home in the country is a dream come true. Purchasing a home in a rural area is an exciting prospect, but also brings about many questions about financing a home on a larger lot or even on multiple acres. GreenStone’s Country Living loan officers have extensive experience in financing country homes and rural properties, and have shared a list of their most frequently asked questions. We hope these FAQs will help make your journey to country home ownership a little smoother and easier!
What would my interest rate be for a country home on acreage?
GreenStone offers a mix of competitive rates and loan terms to meet individual needs. Your interest rate will depend on a number of factors, including your credit score and history, loan to value (LTV) ratio, down payment available, and the type of property. As a GreenStone member, you will also benefit from our Patronage program, through which we share our profits with members, thereby returning to you a portion of your interest paid each year.
Do you offer fixed and variable rates?
GreenStone does offer both fixed and variable rates to accommodate our customer’s needs. Most recently, many customers are opting for a fixed rate solution to take advantage of current low interest rates.
What are expected closing costs?
The cost to close your loan will vary. However, for estimating purposes we recommend planning for 3-5% as a good rule of thumb, but it can vary depending on loan amount, acreage involved, and documentation needed for your loan request – such as if it requires an appraisal or survey.
How much is the down payment?
GreenStone’s standard down payment for a country home on acreage is 20%. If your purchase qualifies for Private Mortgage Insurance (PMI), in some cases we are able to loan up to 95% of the home’s value, which decreases the required down payment to only 5%. However, there are certain criteria, such as acreage limitations, that could impact the ability to secure PMI. Our financial services officers will be able to provide you more guidance based on your specific property.
Can additional money be borrowed for home or land improvements?
If you are looking to make home or land improvements to your property, it is possible to include those costs within the loan. If you are interested in this option, that may require the loan to be converted to a construction loan, which means the loan requirements may be different than a mortgage loan. Another option may be to complete a mortgage loan for the existing home and land, then apply for a separate short-term home improvement loan for the cost of the desired improvements. We recommend discussing your needs with your financial services officer who will go over all the possibilities to help you determine the best option.
Is a survey required?
A survey is not typically required for an existing home purchase because the legal description of the land should already be listed in the existing deed. In some rare instances, if the legal description appears to be inaccurate or questionable, a new survey may be required.
Can collateral other than cash be used for down payment?
Yes, other real estate can be used as collateral toward the down payment, providing GreenStone is the first secured lien on the existing property (meaning there is no other mortgage or lien against the property), providing certain requirements are met. Please note: typically only real estate collateral can be considered; automobiles, campers, boats, or other items are not able to be utilized as collateral for a home or land loan.
If I buy a country home, I’d like to build a shed or pole barn on the property. Can I include the cost in the home and land mortgage?
GreenStone is able to include outbuilding costs in the mortgage if the shed or pole barn will be permanently affixed to the property. Existing outbuildings can simply be included in the home and land mortgage, assuming loan qualification. If a new barn or shed structure must be built, that will require the loan to be a construction loan rather than a mortgage. More details on construction loans can be found at www.GreenStonefcs.com/constructionFAQ. Local zoning ordinances should also be considered for rules or restrictions regarding the construction of outbuildings on the property.
Do you finance single-wide trailer homes?
GreenStone’s financing options do not include loans for single-wide trailer homes. Rare exceptions may be possible when the trailer sits on a large parcel of land with significant acreage. In that case, an option may be for the trailer to be financed by assigning zero value to the dwelling, and only focusing on and financing the land value when the available LTV (loan to value) is sufficient to cover the value of the trailer.
Do you finance pole barn homes?
GreenStone’s financing options can be used to finance pole barn homes. A common challenge customers encounter are the associated appraisal values. As a newer structural trend, few pole barn homes have been resold making it difficult to obtain sufficient comparable values. This often results in conservative appraisal values, which results in the need to increase the cash down payment. However, the land value can help offset appraisal issues.
Another consideration consumers can be surprised by is the cost of pole barn homes. Due to the rapidly increasing popularity, floor plans, materials and contractor familiarity with the process, the cost to build a pole barn home can be quite close to the cost associated with building a traditional stick-built home.
Do you finance manufactured or modular homes?
GreenStone does offer financing for larger manufactured and modular homes, but it is important to understand the specifics for each.
Manufactured homes have a VIN, an issued title and typically a sealed steel undercarriage. The manufactured home stays on the trailer platform permanently once delivered to the home site, which technically qualifies it as a trailer. GreenStone’s lending options for manufactured homes depends on the home’s size and age. Double-wide manufactured homes, shipped on two trailers and joined after delivery to the home site, can be financed. However, GreenStone is not able to offer financing for single-wide mobile homes (under 18’ wide) that are transported on a single trailer.
For double-wide manufactured homes, the financing terms are based on the home’s age, starting at a maximum loan term of 30 years minus the age of the home. As an example, a brand-new manufactured home could be financed for 30 years, while a 20 year old model could only be financed for 10 years.
A modular home is built in a factory, moved by a trailer to the home site, and then moved off the trailer to be placed on a permanent foundation, such as a slab, crawl space or basement. Modular homes can be mortgaged through GreenStone using the same 30-year mortgage terms as stick-built homes.
We hope these frequently asked questions have helped to increase your knowledge and comfort level related to purchasing a country home. For more information about GreenStone financial services, please go to www.greenstonefcs.com or call 800-444-3276 to reach the GreenStone branch office closest to you.