Farm Loans Frequently Asked Questions
General Farm Loan Questions
Yes, since FarmLoans.com is a national lender, we are able to provide financing in these circumstances.
Yes. Though most residential lenders are not able to refinance large acreage properties due to new federal regulations, we are able to refinance residential mortgages on properties that have agricultural use.
When comparing lenders, remember that a lender can structure financing for a borrower in several different ways. A good starting point is to ask each lender what they charge for an origination fee, as well as any other fees they typically charge, (i.e. broker, processing, underwriting). A reputable lender will not hesitate in answering these questions.
There are primarily two things to consider when choosing one lender over another: the quality of service being provided and the cost of services provided. Quality of service is especially important to those who have never had an Ag loan. First-time buyers will likely have many questions regarding the financing process and available options. A good lender should be able to get you through the financing process leaving you confident that you made the right choice.
Depending on the loan program, we do not restrict our customers on what they may use their loan proceeds for. If you own an agricultural operation, or just agriculture ground, and would like to leverage your real estate, we permit many uses including debt refinances/restructures, investments on or off-farm, expansion, settlements, etc.
Farm Plus Financial does not sell your information to any third party for any purpose! We also apply a variety of strategies when pulling credit reports to avoid the likelihood of such triggers within the three major credit bureaus.
During the course of reviewing a loan application, we will request your credit report and credit score from the major credit bureaus. All three national credit bureaus have ‘event-based trigger’ programs, which identify you to be in the market for new credit in the near-term based on certain changes in your credit profile. In this case, the fact that you are applying for a mortgage may indicate that you are likely to be shopping for a mortgage. Other lenders purchase this information and will contact you quickly in an attempt to win your business before you close your loan.
Event-based trigger programs are legal, even if you don’t particularly like them. They meet all Fair Credit Reporting Act regulations and guidelines and are presently offered by all three national credit bureaus (Experian, Equifax, TransUnion). Consumer information could vary depending on the credit bureau providing the trigger notification service, but lenders may purchase a list that includes your name, address, inquiry type, credit score, and other optional data attributes. They may buy your phone number from a third-party provider.
If you do not want to receive pre-screened offers of credit and insurance, you have two choices: You can opt out of receiving them for five years or opt out of receiving them permanently by calling toll-free 1-888-5-OPTOUT (1-888-567-8688) or visiting www.optoutprescreen.com for details. The telephone number and website are operated by the major consumer reporting companies. When you call or visit the website, you’ll be asked to provide certain personal information, including your home telephone number, name, Social Security number, and date of birth. The information you provide is confidential and will be used only to process your request to opt out.
Questions About Our Farm Loan Requirements
Farm Plus Financial has offices all over the United States and can service loans nationwide. Unfortunately, we are unable to lend outside of the United States.
The average loan from application to money funded can take anywhere from 1-3 months. The longest part of the process is the appraisal, as the number of appraisers nationwide has decreased while demand has increased. With some of our expedited loan programs, you can get credit approval in as little as 72 hours. Contact one of our loan specialists to get started now!
FarmLoans.com specializes in loans that are secured by agricultural real estate.
In order to qualify for our financing, we need a minimum 660 credit score from all borrowers.
For most of our loans, there are no prepayment penalties on our loans meaning you have even further flexibility by having the option to pay off or refinance your loan early without financial penalty. In some limited cases, there may charge a penalty if you choose to pay early.
Frequently Used Farm Loan Words and Definitions
Your TERM is the length of time your loans contract is actually in effect.
-If the term is equal to the amortization; your loan will generally have been paid in full after this period of time.
-If the amortization is greater than the term: at the end of the term, you will have the option to renew your loan based on the lower principle balance and rates offered at that time.
A loan’s AMORTIZATION period is the amount of time over which the loan’s payment is calculated.
In this industry it is common for loans to have a “split amortization”, meaning that the loan’s term and amortization periods are different (Amortization Period being greater than or equal to the Term, never less). For the borrower, this creates the benefit of lowering payments (better cash flow) and allows for additional leverage.
Variable Rate Mortgage (VRM) Loan Products are fixed for an initial period, reprice, and are then fixed for the shorter of the same period or the remaining term of the loan.
Adjustable-Rate Mortgage (ARM) Loan Products have a fixed interest rate for the initial period selected, then reprice and fix again for the specified period.
Fixed-Rate Products have a fixed interest rate for the entire loan term. FarmLoans.com offers a variety of fixed-rate loan products up to 30 years with options such as 10, 15, 20, or 30 year fixed rates.
Loan-to-Value (LTV) is the size of your Loan, relative to the property’s appraised value. So say you were to purchase a $1,000,000 property: The most you could borrow would be $750,000, which equals 75%.
A loan’s “term” is the period of time that the borrower has to repay the principal balance. A loan’s amortization period is the amount of time over which a loan’s payments are calculated. Having a longer amortization period than term creates smaller payment amounts, but also creates a one lump sum, or balloon payment, due at the end of the term.
A Baloon Payment refers to the one-time payment at the end of the loan’s term.
If the amortization period exceeds the term, this represents the principal borrowed and still remaining due at the end of the loan’s term. If the amortization period and term are the same this represents your final debt payment.
What People Are Saying
We had a wonderful experience with Farm Plus Financial. The staff assigned to us were professional, organized, and accessible. They explained all our options to us, responded promptly to our many questions, and made sure our loan was processed correctly and promptly. We really appreciated that we could reach them by phone or email and that we worked with the same staff for the whole transaction. I would recommend Farm Plus without reservation
We found working with Farm Plus Financial a truly caring experience. They answered our questions right away, they explained how things would work before we signed any papers, everything was done on-line with very caring staff, a quick phone call or email with a questions was always answered with respect for our individual needs. The Title Company we worked with told us they were impressed with how comfortable and easy it was to work with Farm Plus Financial staff.