Thinking of Purchasing an Acreage?
What you need to know
A common question we get when buyers are thinking of purchasing an acreage is do you need more than 5% down payment? The answer is no! The minimum down payment to purchase an acreage is the same as an urban home. You only need 5% to purchase an acreage. Acreages can however have their own special circumstances. These can make it different or a bit more complex than purchasing an urban dwelling.
The lenders perspective
When a lender is determining the value of an acreage property they will generally only take the value of the residence and the surrounding 10-15 acres. This can cause some issues when there is a shop on the property. As well if the rest of the acres hold a high value. If the value the lender has is lower than the value a home buyer is purchasing an acreage for than they may need to come up with extra down payment to support the difference.This doesn’t always occur but it is something to be aware of if you are looking to buy this type of property. Another thing to note when purchasing an acreage is that if it is highly used as farm land for commercial purposes it may be difficult to finance the property under residential lending. Lenders will look at small hobby farms or acreages with no evidence of commercial use.
No matter what type of acreage you are thinking of purchasing you should come and see us first. If you have a property in mind but not sure how it fits with residential lending policies we can take a look. We are more than willing to run any potential properties by our lenders to see if it fits their guidelines!
Give Jessica or Brenda a call at 403-347-0774