Wife and I are about to purchase some raw land located near us. We currently live in what most people would consider "out in the country." Open land in my area is mostly used for farming with a couple of small, scattered neighborhoods. We can see the land from our backyard and we know the people we are buying the land from. The purchase price has already been set and we are beginning to plan for a closing.
My question is: what is the method to pay for it? We are probably going to build on it within the next two years so refinancing everything to one loan would be something I'd like to do. I've talked to a few loan officers and it seems banks aren't overly thrilled about financing undeveloped land.
My second idea, which is how I figured we would proceed, is to borrow the cash from myself. I planned on withdrawing the money from one of my retirement plans and paying myself back over 5 years. Problem is I would be stuck with a $1,000/mth payment to myself. That is a little less than what I contribute to that account monthly so essentially I would stop contributing and just pay the loan to myself for the next 5 years. The interest rate would be around 6%. Is it worth turning my contribution into a loan payment and sacrificing any potential growth for the account? Trade-off (in my mind) would be having real estate paid for in 5 years.
Any bank type person(s) out there who could offer any sound input? Financially speaking, is there another way to proceed with the purchase that would be a better option?
My question is: what is the method to pay for it? We are probably going to build on it within the next two years so refinancing everything to one loan would be something I'd like to do. I've talked to a few loan officers and it seems banks aren't overly thrilled about financing undeveloped land.
My second idea, which is how I figured we would proceed, is to borrow the cash from myself. I planned on withdrawing the money from one of my retirement plans and paying myself back over 5 years. Problem is I would be stuck with a $1,000/mth payment to myself. That is a little less than what I contribute to that account monthly so essentially I would stop contributing and just pay the loan to myself for the next 5 years. The interest rate would be around 6%. Is it worth turning my contribution into a loan payment and sacrificing any potential growth for the account? Trade-off (in my mind) would be having real estate paid for in 5 years.
Any bank type person(s) out there who could offer any sound input? Financially speaking, is there another way to proceed with the purchase that would be a better option?