Finance a House in the Country
Buying a house in the country with acreage is different than purchasing a home in town. Below are questions frequently asked by those buying a home in the country.
Are there any location restrictions?
For a property to be eligible for financing from FCS Financial, it must be in a rural area.
Are there limits on the number of acres that can be financed with the house?
FCS Financial can finance your home with farmland, recreational property, or even a smaller lot. One way that FCS Financial differs from a traditional bank is that we typically hold and service our rural home loans in-house. Other lenders may sell your loan on the secondary mortgage market. Servicing the loan in-house allows you to have an unlimited number of acres attached to your home loan.
If you are financing a traditional stick-built home, this can be on a lot smaller than five acres. If you are looking at a barndominium or mobile home loan, that home will need to sit on a minimum of five acres.
What if my acreage appraises for more than the house?
If you buy a house along with land and the land appraises for a higher value than the house, that won’t be a problem for FCS Financial if the total value of the property (house and land) meets our lending guidelines. Your loan officer will discuss these guidelines with you.
An appraiser provides a value for the home. Our guidelines state that the remaining expected life of the home must be equal or greater than the term or length of the loan. If it’s not, you and your loan officer can discuss altering the term of the loan.
Does this house have to be my primary residence?
This house does not have to be your primary residence. FCS Financial finances rental properties and secondary homes, but there are additional pieces of information we need to determine if the loan request is eligible for financing through FCS Financial.
What information do I need to provide to apply?
As you start looking for your piece of paradise in the country, FCS is happy to talk with you through the process. You can start the application process prior to finding the exact property. We will need the following information for all applicants on the loan:
Recommended by LinkedIn
Some other items that we will need throughout the credit evaluation process are three years of tax returns, most recent pay stubs, homeowner’s insurance estimates, and verification of cash accounts.
What is the application process?
At FCS Financial, we have a few ways you can send your application to us. If you visit our website, you will find an online loan application that, once completed, will be sent to a loan officer. Your loan application will be reviewed, and the loan officer will reach out with additional questions.
You can also call your local branch office to set up an appointment with a loan officer who will take your application. Once FCS Financial receives your completed application, we will send out required disclosures and transfer the loan to our credit department to be analyzed.
Is there a down payment requirement?
The standard down payment for a home loan with FCS Financial is 20% of the property value. That being said, if you have additional land or other real estate that can be taken as additional collateral, we have different down payment options that may be available.
What fees should I be prepared to pay?
FCS Financial is a member-owned ag finance cooperative. As a borrower, you will purchase stock in the amount of $1,000 to become a member-owner of FCS Financial and be eligible to receive patronage payments each year. Your stock purchase is included in your closing costs.
You will be responsible for your loan origination fees, title insurance fees, appraisal and other fees that may apply. Fees vary based on the size of your loan. All fees will be disclosed to you before you agree to the loan terms. You will be able to discuss these with your loan officer.
Will my interest rate be fixed or adjustable?
FCS Financial offers home loans with fixed or capped variable rates with 5- to 30-year terms. If the home you are purchasing is your primary dwelling, the 30-year option may be for you. If you plan to purchase a home that will be used as a rental or for another purpose, you may want to consider a maximum term of 20 years.
Use our online loan calculator to calculate different payments by varying the down payment amount or length of the loan.
To learn more about FCS Financial rural property loans, contact your local loan officer or visit our website.
Morgan Wallace, NMLS #2107350, is a Financial Services Officer in the FCS Financial Joplin office. With more than 5 years at FCS Financial, she enjoys helping Missouri farmers achieve their goals. If you’re looking for an ag lender who understands the ups and downs of Missouri agriculture, reach out to an FCS Financial loan officer today.