“Some buyers don’t want to tie up too much money in a property right away,” says Scott Garrett, CEO of Freedom Northwest Credit Union, which has provided financing for a number of PotlatchDeltic property buyers in Idaho. “And for many people, a loan on a recreational property can be a fairly simple process.”
Garrett, who leads a team that finances many rural land sales in Idaho, took some time to answer some questions that potential borrowers often have:
Garrett: There are lenders in many parts of the country who finance rural properties, and it’s important to work with a lender who understands this type of property. It’s different than financing a primary home. We lend on a wide variety of rural properties, knowing that it’s always important that a property have several things in place – clear access and a reputable appraisal.
Garrett: We will certainly want to have money down to make a loan. The amount the borrower puts down often depends on the size of the loan. Many buyers will put 50 percent down, while 30 percent is considered a considerable down payment. For us, 20 percent is usually a starting place.
Garrett: There often can be ways to do that. As a hypothetical example, let’s say someone is getting an $80,000 property and they say they can put half down, $40,000. We may work it out where they keep $20,000 of that to put into improvements that will increase the value of the property.
Garrett: That will depend on the quality of your credit, and how much you put down.
Garrett: It’s not a complicated process. One thing that can help it go very smoothly is to get a letter of credit from a lender before you pick out a property. This ties into how it’s a good idea to talk to the lender before you get too far down the road on buying a property.
The PotlatchDeltic Preferred Broker in your area can recommend quality lending options for you to consider as you start the process of getting your dream property.