Expert: Dick Dennis - 6/27/2006

Question
Mr. Dennis,

I have been out of college now for over a year and half, and I have a fairly secure-good engineering job with the State. The only problem I have is my high-rate private student loan.  The question I have is this....My grandfather has about 25 acres in a very rural area, which he is willing to give me.  This land is where I plan to one day build a home and raise a family.  How easy would it be for me to get a loan to cover the assessed value of the land, and roll my student loan into the purchase of the land?  My main goal in this venture is to secure a place to eventually live, and get rid of my high variable rate loan.  What do you think?  

Answer
If you are even ABLE to get a loan on that land, the most any bank would lend on it is MAYBE 50% of its value the BANK has put on it in an appraisal.

If however you were to plan building a house on that land, then they would be willing to lend more because the house gives more value to it.

I don't know where you live, Sean, but you might want to sell off parts of that 25 acres and by so doing, perhaps having what is left for you free and clear and no concern over a loan on it.

As for the student loan, you're going to have to pay that off one way or another and it WILL affect how much of a loan you may get on real estate. I am not aware if you can roll your student loan over into a real estate loan, but I strongly suggest you talk to a REAL ESTATE attorney and/or mortgage broker or bank and find out which is the best way for YOU to handle this in your state.

I do wish you well.

Dick Dennis         dixiedee13@aol.com

www.OldProblemSolver.com