Mortgage

[holly smoke]

Morning all
I have the chance to purchase a block of land more or less next door where is the best place to get a mortgage ie bank or amc

 

[Gedd]

Morning all
I have the chance to purchase a block of land more or less next door where is the best place to get a mortgage ie bank or amc

Bank was best when I bought my farm 20 years ago

 

[Boysground]

Best thing to do is get a quote from 2 or 3. I have done it and it is surprising how rates can change when they know there is somebody else after the business.

Bg

 

[Exfarmer]

Draw up some long term cash flows. The better the business plan the greater chance of good rates.
AMC are stilla good place to start

 

[Fergieman]

Last year priced up bank and AMC Went with the bank. Depends on what you have as security as well. Get some quotes. AMC need double the land area to secure against.

 

[curlietailz]

Echo previous posts

You are a customer wanting to “buy” money.
Get quotes off 2 or 3 different places, your own bank, AMC and another Rural Moneylender

Weigh up interest rates, payback periods, security and how you feel
Make sure your business plan stacks up and that you can afford the repayments if land values drop

Good Luck

 

[Agrivator]

The only advantage of AMC is that they don't want annual accounts so long as you maintain payments.

The main disadvantages of AMC are that they take weeks or even months to transfer the loan. They also involve your Solicitor to make sure everything is watertight and require a first charge over the assets.

If you get on ok with your bank, stick with them instead of having two lenders.

 

[2wheels]

Echo previous posts

You are a customer wanting to “buy” mone
Make sure your business plan stacks up and that you can afford the repayments if land values drop

Good Luck

does it matter if the land price drops? the important thing is being able to pay the interest and capital if times are hard and interest rates rise.

 

[Exfarmer]

The only advantage of AMC is that they don't want annual accounts so long as you maintain payments.

The main disadvantages of AMC are that they take weeks or even months to transfer the loan. They also involve your Solicitor to make sure everything is watertight and require a first charge over the assets.

If you get on ok with your bank, stick with them instead of having two lenders.

Be aware that most banks are only short to medium term lenders. It may be that you can keep paying the loan, but there will be very little capital paid after 5 years and if bank demand capital back and land values have crashed, you could be in trouble through no fault of your own

 

[curlietailz]

does it matter if the land price drops? the important thing is being able to pay the interest and capital if times are hard and interest rates rise.

I was thinking negative equity situation. If you go variable rate and interest rates shoot up ( I remember 15% interest rates !!) and you need to sell some/all to “get out”

Could consider fixed rate.... that is you know exactly what your payment per month will be

 

[Exfarmer]

I was thinking negative equity situation. If you go variable rate and interest rates shoot up ( I remember 15% interest rates !!) and you need to sell some/all to “get out”

Could consider fixed rate.... that is you know exactly what your payment per month will be

At the moment anyone would be a fool not to go fixed, it is just getting the best deal, a 1/4% adds up to a lot of money over 20 years!

 

[lazy farmer]

At the moment anyone would be a fool not to go fixed, it is just getting the best deal, a 1/4% adds up to a lot of money over 20 years!

Been on variable for a land loan since we bought it. Always had the intention of fixing it when rates began to rise.
That was 5 and 1/2 yrs ago. Only four and 1/2 to go. Most of the interest now paid. Incredibly cheap money so far.

 

[Bill the Bass]

One of the biggest advantage of AMC is they ‘lend and leave’. Nothing worse than a bank manager turning up once a year to tell you what you already know, eat your best biscuits and charge you a fortune for doing it.

 

[Plain steer]

One of the biggest advantage of AMC is they ‘lend and leave’. Nothing worse than a bank manager turning up once a year to tell you what you already know, eat your best biscuits and charge you a fortune for doing it.

That should be for a overdraft facility not a long term loan

 

[hally]

One thing we learned about the AMC is that if your mortgage is fixed as was ours, when we approached them to pay it off early we had pretty hefty early redemption charges compared to another block we had on variable rates which was easy to pay off early.

 

[lazy farmer]

One thing we learned about the AMC is that if your mortgage is fixed as was ours, when we approached them to pay it off early we had pretty hefty early redemption charges compared to another block we had on variable rates which was easy to pay off early.

That would depend on the interest rate when you took the loan out.
If higher than currently you pay a lot if lower then they pay you!
Same with all lenders.

 

[Exfarmer]

It is highly unlikely we will see interest rates anything other than higher in the future. If the rate does drop it will never practically go lower than zero. It is currently .75%
I would say fill your boots. I never paid less than 10% all my working life

 

[jendan]

It is highly unlikely we will see interest rates anything other than higher in the future. If the rate does drop it will never practically go lower than zero. It is currently .75%
I would say fill your boots. I never paid less than 10% all my working life

I guess they might have said that in Japan 30 years ago.They are still about 0%

 

[Bossfarmer]

The only advantage of AMC is that they don't want annual accounts so long as you maintain payments.

The main disadvantages of AMC are that they take weeks or even months to transfer the loan. They also involve your Solicitor to make sure everything is watertight and require a first charge over the assets.

If you get on ok with your bank, stick with them instead of having two lenders.

how do you mean months to "transfer" the loan? no accounts needed upfront just assets?

 

[jackrussell101]

It is highly unlikely we will see interest rates anything other than higher in the future. If the rate does drop it will never practically go lower than zero. It is currently .75%
I would say fill your boots. I never paid less than 10% all my working life

German Bunds are negative, ours could be similar or stay low for a very very long extended time, take the Japanese example. It's hard to see wages ever going up significantly, possibly in our lifetimes with the automation and AI technologies that are waiting in the wings... and ultimately it's wage inflation that dictates interest rates...