The Real Estate Encyclopedia
Land For Sale In Alabama-The Loan Process
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If you are in the market to buy land for sale in Alabama you will need to prepare early for the loan process. In the new world of loans post the great collapse whether all want to call it that or not, that is what has happened, you are in a new lending environment.


When looking to purchase land for sale in Alabama letís go over some conventional loan procedures and we will discuss some alternative loan methods. If you are in the early stages of finding yourself that perfect tract of land to retire on, take the kids hunting on or maybe your looking for commercial land for sale donít wait until you find the land to begin the loan process. In years past you could find the property you liked and run to any bank and get yourself a land loan but those days are gone and if not forever certainly for a long time. The first thing you should do in this market is shop your loan and ability to obtain a loan especially if you are looking at rural land for sale in Alabama with no improvements these have become the hardest loans to get.


I would suggest starting with the bank you have done business with in the past, check with them and see if they even do rural land loans. If your bank does not do rural land or even if they do I would still go to your closest Ag lending Bank, in Alabama that would be First South Farm Credit, and make application for a loan. Some of the things you will need is three years tax returns, file out their loan application and if you are buying in a business name or if you are self employed have a balance sheet prepared and a profit and loss ready you are going to need them.  If you are wondering why you would start looking for land by going to a bank first this will let you know how much acreage you can get and what your down payment and terms of loan will be. It is much better in negotiations with a seller if you have proof you can perform on a loan.


I will outline some alternative solutions if your credit is a little week or if you donít have the required down payment for your land for sale in Alabama. One of the first things you can do is use additional collateral like 401K, equity in your home or business, or you may use some unconventional assets like equity in equipment if thatís your business assets. Another unconventional method is called cross collateralization; this is when a bank will attach a lien on an asset you own as well as the property you are trying to buy. The problem with some of these alternative methods are banks are more regulated today than they were three years ago and may not go for some of this unless you have really good credit but just be a little short on down payment.


In todayís financial market or we could say unfriendly lending environment at the least starting the loan process early and even the first thing when looking to buy land for sale in Alabama will at the very least give you peace of mind on what you can and can not afford to buy and also give you negotiating power with a seller.


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