Is a 10% rate on a 5/1 ARM for 30 years landloan a good rate borrowing $70k credit scores in 700

Live in Alabama. Applying for a land loan to later build on. 10% seems really high when my 30 year fixed mortgage is at 6.25% from a couple years ago.

Is a 10% rate on a 5/1 ARM for 30 years landloan a good rate borrowing $70k credit scores in 700%26#039;s?

Never get an ARM if you can afford it. The balloon payment will kill you. And no, that seems like a high rate.

Is a 10% rate on a 5/1 ARM for 30 years landloan a good rate borrowing $70k credit scores in 700%26#039;s?

That sounds like a horrible rate but it may depend on how much you%26#039;re borrowing.

Are you borrowing more than the value of the land, thinking that you%26#039;ll use the money for construction later? If so then that would explain the higher rate. It might be a better idea if you borrow only as much as you need to purchase the property right now. When it%26#039;s time to build you can go for a construction loan that will turn into a permanent mortgage when you finish building and it will incorporate the land loan as well. That will probably have a much more favorable interest rate.

Try speaking with a loan officer at a bank that offers construction loans. Unless there is something very unusual about the property you should be able to get a much better rate.

Is a 10% rate on a 5/1 ARM for 30 years landloan a good rate borrowing $70k credit scores in 700%26#039;s?

For a land-only rate, that is fairly typical but you might want to shop around a bit.. You%26#039;ll do far better if you buy the land and build at the same time. Your construction %26amp; land purchase loan will be in that region, but once your home is built you can roll it into a conventional loan.

You can also buy the land now and roll it into a conventional loan at market rates once you build.

Is a 10% rate on a 5/1 ARM for 30 years landloan a good rate borrowing $70k credit scores in 700%26#039;s?

too high. should not exceed 6.75%, under any circumsances, with bureau between 700-750.

Is a 10% rate on a 5/1 ARM for 30 years landloan a good rate borrowing $70k credit scores in 700%26#039;s?

If you need a construction loan for this land, contact me. If you are just buying the lot and are not quite ready to build, you can get a lot loan for somewhere near prime, Interest only payments required (while you investigate your options), I can also help you to secure financing from my nationally known company.

For the record, prime is at 8.25%, so 10%, depending on your qualifications and income documentation, is not that far off of the mark!