What closing costs should I expect on a land loan?

Question

Turnrow Capital · Accepted Answer

Budget roughly 3–5% of the loan amount for land loan closing costs. The big line items: origination points (1–3%), appraisal ($2,000–$6,000-plus for ag properties), title insurance, escrow/closing fees, recording, and lender legal. On a $500,000 loan, expect $15,000–$25,000 all-in, often financeable within your LTV.

The appraisal deserves its own line because ag appraisals are not house appraisals. A qualified ag appraiser inspecting soils, water, improvements, and permanent plantings charges $2,000 on a simple parcel and $6,000 or more on a vineyard or complex ranch — and their calendar is the single longest lead time in most closings.

Title insurance on rural land costs more per dollar than urban policies in some states because of the search work: old easements, mineral severances, survey gaps. Do not skip the owner's policy to save a few hundred dollars; on land, title defects are where real money disappears.

Most costs can be netted from loan proceeds rather than paid out of pocket, as long as the total loan stays inside the LTV cap. Ask every lender for a written, itemized estimate at term-sheet stage — the honest ones volunteer it.