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View Full Version : Why I LOVE Farm Credit...



shakeytails
Aug. 10, 2010, 10:23 PM
Got a letter in the mail from Farm Credit a couple days ago. They didn't have my current phone so they couldn't reach me to tell me to come in to drop the interest rate on my loan from 6.15% to 4.9%. So I stopped in today and the rate had dropped to an even better 4.65% so I signed on the dotted line. It cost me about 1 month's payment to convert the loan. No appraisals, no closing costs, no title BS and the term of the loan (payoff date) stays the same. This is the 3rd or 4th time I've converted a loan with them. SOOOOO much easier than a bank. I highly recommend Farm Credit to anyone in the market to finance a farm.

Concordia
Aug. 10, 2010, 10:27 PM
Wow! Thats pretty dang impressive, especially considering the state of the lending market. Good for you!!!

Guilherme
Aug. 10, 2010, 10:50 PM
I've got an appointment a week from tomorrow with my friendly Ag Credit loan officer. :) Note modifications generally run about $900.

The Bad News is that we likely won't get a patronage refund again this year, as they are continuing to build reserves against losses. Ag Credit is a financing co-operative so they have to be extra conservative in a volitile real estate market.

Maybe next year.

G.

tle
Aug. 11, 2010, 09:39 AM
I have, for the most part, enjoyed my dealings with Farm Credit. They don't hold my current loan but I plan on trying to get in with them next year when we pick up the land.

My only complaint has been their "assumptions" and "feelings" that get put into the process. First time... "no, we can't let you assume this loan and then refinance because you just might assume and tell the seller to take a hike (not refi) and it will look bad on us." ????? Second time... "you meet all our criteria on paper, but we FEEL you may be stretched so we're denying your loan." ???? ARGH!! Talk about frustrating! Of course the seller of the farm we just purchased had a similar problem with them back in 2001 -- he came in with $50K in cash and a $100K/year job and they only ok'd him for a home purchase of $125K. ????? He thinks it's their cycle on how much they have available for lending... tried a year later and I guess they courted him like the prom queen.

Guilherme
Aug. 11, 2010, 10:54 AM
I, too, have found Farm Credit more "mercurial." When we bought our place I applied with Farm Credit and Ag Credit. Ag Credit made the better offer so I went with them. Two days before we were scheduled to close Farm Credit made a bid with an interest rate .5% lower. I declined it as "too little, too late." I also have reservations about "last minute offers."

So far the Ag Credit group has been outstanding. But one rule that governs both is that the income of the borrower must support the loan. This is a change from times past where the value of the land supported the loan. Many farmers ended up in forclosure as they overextended themselves based upon the value of their property, not the value of their business. I suspect that was a good change.

G.

BasqueMom
Aug. 11, 2010, 02:44 PM
Wow..that is awesome. We're trying to refinance...Wells Fargo who holds
the mortage says no. FHA is going to require about $12,000 in costs
and conventional $10,000 and this for a $163,000 loan. So if we refinance
and include the costs into the loan, now what remaining equity we have has
taken a big hit. Arrrgh!

With all the so-called financial reform out there, why wasn't something included to make re-financing through your present lender relatively painless--
new appraisal, credit check; but no, you have to go through the whole
process again. Sigh!

shakeytails
Aug. 11, 2010, 03:10 PM
Wow..that is awesome. We're trying to refinance...Wells Fargo who holds
the mortage says no. FHA is going to require about $12,000 in costs
and conventional $10,000 and this for a $163,000 loan. So if we refinance
and include the costs into the loan, now what remaining equity we have has
taken a big hit. Arrrgh!

That sucks! I have a relatively small loan ~60,000. The cost to convert the loan was $350.

As for "feelings" accounting for whether Farm Credit approves you or not, that might be true. I didn't have a lick of trouble probably because I was personally introduced to the loan officer by a neighboring farmer who does tons of business with them.

inca
Aug. 11, 2010, 04:46 PM
I got an unexpected call from our Capital Farm Credit rep saying we could do a loan conversion. Dropped our interest rate to 4.5% for a very reasonable fee of $514.70. We plan on paying off our loan within the next 3 years but will still save $6K in interest, which is a pretty good return on our $514.70.

I

Guilherme
Aug. 12, 2010, 08:05 AM
For those with property of at least an acre (rural, suburban, urban) a call to Farm or Ag credit would be worthwhile. They do conventional mortgages, too, and their fees are generally lower.

As to having to go through the entire process on a re-financing, that's an unfortunate by-product of the very loose standards of a few years back. It's also a way to help the bank maintain profit margins. That's not a politically correct thing to do, but is essential if you want private banks there tomorrow (as opposed to a Federal lending office of some sort).

G.