Know your credit score
The first step to getting any mortgage is to know your credit score. Your FICO score is a number used to express how creditworthy you are. If your score is below 700, you may want to consider spending a few months raising your score up before looking for a mortgage. Performing some credit repair before shopping for your mortgage can save you ten of thousands of dollars.
You can repair your credit by closing accounts you don't use, paying down your debt and making payments on time. With a just few hours of work trying to repair your credit, your score will likely get a big increase.
Buying land to custom build?
If you have your dream home planned out in your head and can't wait to see it built with all of the features and options you desire, your mortgage needs will be much more complicated than if you are looking to buy a home that is already built.
When custom building, you will first need to buy your land. Depending on where you live and how much land you want, you may need to get financing to be able to afford your farm. If this is the case, talk to the loan officers at your local banks. Some of these banks will be able to write you the loan "in-house". If you plan on building as soon as you buy the land, they can also build a construction loan into your mortgage. Then, as soon as your home is built, you can refinance to a permanent mortgage.
In addition to your local banks, you can look to see if there is a Farm Credit Services location that serves your area. Farm Credit Services is a network of independently owned and operated credit and financial services institutions that works especially with farm owners and other rural residents.
Your other option for purchasing your land is to ask the land owner to finance you. Many land owners understand that it can be difficult for buyers to get financing through conventional means. In order to sell their land, they are often willing to provide financing until your home is built and you can obtain a conventional mortgage.
Financing your Improvements
A horse farm is nothing without facilities to use your horses. Barns, riding rings, fences, and all of the other improvements you'll want do not come cheap. Unless you have saved a good amount of money, you will need to find financing for these farm essentials.
Before looking to get financing for your horse facilities, ensure that the zoning laws and community regulations allow the facilities that you wish. Then, get firm price quotes for each project. Discuss with the vendors what financing they can provide. If you are buying a pre-fabricated barn, such as a Morton, Barnmaster, or MD Barn, the manufacturer may offer you an excellent financing package.
Before agreeing to financing with the vendors, take your price quotes along with a copy of your home appraisal back to your local bank or Farm Credit branch. Discuss the options of getting a home equity or farm improvement loan. If you do not have sufficient equity in your farm already, you can often get a loan where the money is set aside in a special fund that is only paid out upon completion of a value-enhancing project -- a great way to get that riding ring you've always wanted.