Posted on: 16th Feb, 2011 10:34 am
I live on a 4 acre property in San Diego. We have 2 acres of Avocado trees and sell the fruit to a pack house. My last 3 years of tax returns show a profit on the sale of avocados. I currently have a conventional loan through Washington Mutual (now Chase). I have talked to Chase and Wells Fargo about refinancing the loan. They both state that new Fanny Mae guidelines will not let the banks lend money on "Agricultural property" although my husband and I both have full time jobs and great credit scores and have 70% equity in the property. We did not have any problem getting the loan to buy the house 8 years ago. The banks suggested we contact the USDA for a loan. They will not give us a loan because we do not have enough acreage and the avocado sale is not our primary source of income. A great number of people in this area have avocado trees and sell the fruit. Is no one eligible for a mortgage on their home?
Try your local bank - It will be difficult because it is seen as a ag loan.
But with that kind of equity you may be able to get a bank to work with you.
Not sure what kind of rates you will get - what is the reason for the refi?
But with that kind of equity you may be able to get a bank to work with you.
Not sure what kind of rates you will get - what is the reason for the refi?
my original loan is held by fanny mae currently. why wasn't the property considered agricultural 8 years ago when i bought the house? our current 30 year fixed is at 5.375 and we have a daughter is is attending college in the fall. we wanted to refinance and pull money out to pay for her school.
Welcome Jennyihm,
This is something which will be best answered by your lender. You may contact your lender and try to get the matter clarified.
This is something which will be best answered by your lender. You may contact your lender and try to get the matter clarified.
Unfortunately, what was taking place eight years ago ought not to have taken place in many cases; and will never occur again in most cases, either. Lenders had all kinds of leeway in assessing their loan requests back then, and Fannie & Freddie both were more than liberal in how they viewed loans.
Things have tightened up in every aspect of mortgage lending since then - and continue to tighten up now as well. What we could do a month or two ago won't fly now.
The occurrences of eight years ago are not spilt milk.
Brian's suggestion that you seek out a local lender - one that'll consider holding your loan in portfolio rather than selling it - is a great idea. If you have a credit union in your area where you can borrow, or a local bank that does portfolio lending, those are your best bets for unusual properties such as yours.
Now I know you don't consider the property to be unusual, but lenders do; so you need to find un-conventional lenders to assist you in your search for a new loan.
Things have tightened up in every aspect of mortgage lending since then - and continue to tighten up now as well. What we could do a month or two ago won't fly now.
The occurrences of eight years ago are not spilt milk.
Brian's suggestion that you seek out a local lender - one that'll consider holding your loan in portfolio rather than selling it - is a great idea. If you have a credit union in your area where you can borrow, or a local bank that does portfolio lending, those are your best bets for unusual properties such as yours.
Now I know you don't consider the property to be unusual, but lenders do; so you need to find un-conventional lenders to assist you in your search for a new loan.
I would see if a local bank will give you a second
You should and I repeat should NOT touch that first because you will not be able to get a rate in that range. College is a big expense and you are doing your child right but you can get this done without messing with the great loan you have now. Look at financial aid and student loans - you can get a decent loan that way - unless you can get a second on the home I would advise going that route instead.
You should and I repeat should NOT touch that first because you will not be able to get a rate in that range. College is a big expense and you are doing your child right but you can get this done without messing with the great loan you have now. Look at financial aid and student loans - you can get a decent loan that way - unless you can get a second on the home I would advise going that route instead.