What type of loan should I get?

[BGMWPD320]

I purchased my home last year and I am wanting to purchase the empty residential lot next to my house.  In addition to the lot, I would also like to include the amount it is going to cost to put up a privacy fence.  In total, it is going to be around 12k for the lot plus the fence.

What do the loan experts here recommend (my scores are in my sig).

[DallasLoanGuy]

Lot loans are different than Single Family Residence Mortgages that we discuss here.

This is a local bank type of loan... I doubt that you will get anything with those scores.

 I hope that I am wrong.

[BGMWPD320]

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@DallasLoanGuy wrote:

Lot loans are different than Single Family Residence Mortgages that we discuss here.

This is a local bank type of loan... I doubt that you will get anything with those scores.

 I hope that I am wrong.

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Wow, that isn't what I was expecting to hear.  I thought my scores were decent (according to my myfico reports, only TU isn't about average).  I think I can get a loan, for the lot, through one of the local banks that we've done business with in the past.

It amazes me that I can get a 125k home loan and a 32k car loan without any problems but I'll probably have a hard time getting a 12k loan for a land purchase (now with better scores).

[ShanetheMortgageMan]

Might want to look into getting a personal or signature loan from a bank.  A lot loan requires 20-30% down these days and lenders are usually only interest in lending $20-25k or more.  I'd call up local community banks to see if they have lot loan programs for you, I'm sure if that is how much a lot of land costs where you are that there has to be some local bank with a niche doing loans on them.

[BGMWPD320]

I know this might be out of you guys realm of expertise but I'll ask anyway.  Do you think it will be easier for me to just try and get a 12k personal loan?  I'm not sure if banks are lending money for personal loans right now with the economy crisis.

[ShanetheMortgageMan]

I think it'd be worth a shot.  I know my credit union gives personal loans up to $10k with just some simple income verification & a credit check.

[Anonymous]

Can't you get some sort of bridge loan and then refinance the whole thing as one property? It might take getting the lots adjoined legally in some way with your local municipality, but I was under the impression that lots are hard to finance because they don't have immediately usable value. If, however, it was just part of your current house and yard, then it would be more easily securable I would think. And those scores should be good enough for a refinance of some sort, right?

[ShanetheMortgageMan]

Bridge loans aren't as available these days as they have been in the past (since they are a form of 2nd mortgage and typically are used to buy more real estate - both which are considered higher risk now), but if there is sufficient equity in the primary residence and a bridge loan is available then that would be a good option as well.  Good thinking.  Just have to research the process of joining one lot to another (here it takes many months), determining the value of everything together afterwards, and pre-qualify for a refinance loan (because you want to have an exit plan from the bridge loan lined up)... once those are lined up then going forward with the bridge loan would be safe.