b'PROPERTYP E R S P E C T I V EFall 2022 | Volume 11 | Issue 1Q: What are some tips for recreational land buyers who want tofinance their property?A stable income and good credit, along with cash down, are keys.Borrowers should look to have enough cash down to cover closingcosts and to put 20% down on the purchase of the property. Moredown may be required and can even be beneficial as that can also helpwith the terms of a loan. Many recreational land buyers On large deals, a larger percentage down payment may be needed.have never financed a rural Sometimes, borrowers leverage real estate they already own or haveproperty before, so its important to substantial equity in to help finance a recreational property purchase.Also, using an existing primary residence as additional collateral canknow some basics as you start help satisfy loan-to-value requirements, helping borrowers need lessyour land search. cash at closing. As part of the PotlatchDeltic Q: What are some common mistakes land buyers make as they arePreferred Broker Network, which working through financing?helps buyers around the country, Some potential borrowers spend all their available cash paying offwe know that its important to work other debts prior to applying. I advise waiting until you are workingwith lenders that offer extensive with a lender before deploying cash reserves to pay off other debts. experience in financing ruralproperties. In Idaho, where our The lender can help guide these choices based on cash-downbrokerage handles property sales, requirements and available terms, helping the borrower make the bestone of our referring partners is use of cash reserves.Freedom Northwest Credit Union, Q: Are there certain things to look for in financing land beyond gettingwhich knows rural land financing a favorable interest rate?inside and out. A borrower should always consider loan fees as well as anyWith this in mind, here is a Q&A on requirements for development on the property. Some lenders requireland development, such as building a structure, within a certain period,financing a rural land purchase while other lenders may have no such requirement. with Scott Garrett, President/CEOof Freedom Northwest. The borrower should also pay attention to the loan structure. Forexample, how long is the rate fixed? And does the loan note have aballoon payment? Continued on Page 4'