|
|
 World 4D Champ
Posts: 28264
    
Location: PA | Anyone finance a barn?? Who all did you use to finance? Did anyone go through a farm credit bureau?
Were re going to be looking into building a barn this summer and right now just looking into our options. I'm not even sure if it's possible to finance a barn...?? |
|
| |
|
Extreme Veteran
Posts: 448
Location: lone star state | We are in the same situation so I will follow this post :)
So far what I have learned is you have to have a lot of cash or collateral such as vehicle or trailer with free titles to use as collateral. I think it gets complicated if the land you plan to build on already has an existing home on it that is your homestead. Lenders are really leary of loaning $ to build barns in my area. Sorry I'm not much help..... |
|
| |
|
 Veteran
Posts: 146
| Morton Barn advertises they offer financing. I have no idea what their program is like; I had them out to do an estimate and couldn't afford them. I don't think any conventional bank would loan for building a barn, maybe a rare one out there might, not sure about farm banks/credit unions, would you need to show some kind of business plan for farming? You might need to take out some kind of personal loan and have some cash available to get it done. We ended up paying cash, my little nest egg is now a barn. Sit down and figure up your budget, what you need and what you can live without in a barn. Don't forget to factor all the extras like stall mats, feeders, electric, water, etc. it adds up quickly. Also, expect to go over budget so you have some wiggle room in the cash flow. Sorry that isn't a lot of help. |
|
| |
|
Elite Veteran
Posts: 1032
Location: IL | We are hoping to build a barn this summer/fall too. My husband went and talked to a local bank and they basically said the way they do it is by doing a home equity loan. So we'll have to have our house appraised and then whatever amount OVER that it's appraised for is the amount we can borrow. So if a house was bought for 100k, but appraised out at 150k, then you would be able to borrow 50k. That's how they explained it to us. |
|
| |
|
 Can You Hear Me Now?
Location: When you hit the middle of nowhere .. Keep driving | We are taking a mortgage out on the farm to build a barn with space for stalls/a riding arena/ a place for some other livestock and some hay storage at the back this summer. Will likely cost us around $50-60K (with us doing the work... it's big). I am fortunate that the farm is paid off so financing is easy and we are taking out the $150,000 about 30% of our property value for that and some home improvements and to build a secondary garage/shop. The bank liked the idea and agreed because it would substantially up the property value we are just going to re-access after it's all completed to see the property value gains. I'd see what capital/equity you have in your home based on how much you have paid off on your mortgage or upgrades you have done to increase the value and talk to a bank.
eta: you need a good credit score now a days and show income too but it's do-able through a bank.
Edited by ndiehl 2015-01-17 10:01 AM
|
|
| |
|
World 4D Champ
Posts: 28264
Location: PA | Thanks everyone...
We unfortunately just bought our house in october so we can't do a home equity or anything like that.
We we have a local farm credit bureau I'm going to go talk to...not sure if they do barn loans, but worth a shot. |
|
| |
|
Duct Tape Bikini Girl
Posts: 2554
| We bought a new house 11 years ago. Luckily, we were able to get a home improvement loan with a local bank to build fence and barn. |
|
| |
|
Extreme Veteran
Posts: 464
| Unless these barns are going to be income producers, you shouldn't be borrowing money to build them. |
|
| |
|
Extreme Veteran
Posts: 448
Location: lone star state | Bigfoot, I think banks agree which is why they shy away from lending funds to build. Plus homestead laws complicate foreclosure should the need arise. |
|
| |
|
Extreme Veteran
Posts: 464
| People shouldn't be financing anything to do with a hobby, trailers included. I see these comments all the time. Even worse, I rodeo with people that are floating on debt just to have the best. Just because you can afford the payment doesn't mean you can afford the item. |
|
| |
|
 Accident Prone
Posts: 22277
Location: 100 miles from Nowhere, AR | We financed our barn through our local bank. 3 years, tractor as collateral, called it a business loan. The funny thing was my dad traded our tractor without saying anything because he forgot that one was ours. This caused some scrambling around on our part, but our banker just laughed. We wrote the barn off on our taxes as a multi-purpose agricultural building. |
|
| |
|
Accident Prone
Posts: 22277
Location: 100 miles from Nowhere, AR | Bigfoot - 2015-01-18 8:54 AM
People shouldn't be financing anything to do with a hobby, trailers included. I see these comments all the time. Even worse, I rodeo with people that are floating on debt just to have the best. Just because you can afford the payment doesn't mean you can afford the item.
If you are smart about managing your debt, I see nothing wrong with financing your fun. To a point. Now, that said, we financed our LQ trailer for 3 years and I had it all planned out to fit neatly between vehicle purchases. Well, my car has decided it's old since it hit 100,000 miles and keeps needing repairs almost continuously, but we can't afford to replace it because of the trailer payment. |
|
| |
|
Can You Hear Me Now?
Location: When you hit the middle of nowhere .. Keep driving | Bigfoot - 2015-01-18 8:54 AM
People shouldn't be financing anything to do with a hobby, trailers included. I see these comments all the time. Even worse, I rodeo with people that are floating on debt just to have the best. Just because you can afford the payment doesn't mean you can afford the item.
This I don't agree with 100%... horses and some items I do because something can happen and your out the equity, buildings are a bit different. I don't think people should over spend and have more debt then equity either. IMO
Our farm is quite large, and even though it's currently a hobby farm the rest of the land is being used by another farm which we get rent for, and I would like to get a few sheep to raise so it's giving me the opportunity to expand. The shop will also have an income producing apartment above, which will eventually be my moms apartment when she's ready to retire and downsize. We have so much equity in the farm they didn't care. I don't always agree that if it's a hobby you shouldn't get a loan depending on what it is. I think something like a barn can help your equity in some cases and it should be considered. Also not everyone has thousands and thousands of dollars to spend putting up another building on the property (myself included) but I have no debts other then this and a lot of equity. I also think if your young enough to make it worth while it will be easier. |
|
| |
|
Extreme Veteran
Posts: 448
Location: lone star state | I agree three four luck with financing fun to a point we currently have a trailer payment and i actually hate it!
But as you just mentioned things usually don't go as planned. Unexpected repairs come up. Vet bills. Human medical bills. The list goes on and on. We are saving, the old fashioned way. I'm not liking it but its the only way logically to make it work... |
|
| |
|
Extreme Veteran
Posts: 464
| I've did the rodeo thing for years and years. I know full well how expensive it is. I even keep a ledger. It's in the console of my truck. I'm just sayin the sporty is expensive enough. If you having to make payments to keep going, or to have the "stuff" to do it with, then you can't afford what your doing. |
|
| |
|
Accident Prone
Posts: 22277
Location: 100 miles from Nowhere, AR | In our case, we had more than enough in savings to have paid cash for the trailer, but I didn't want to and the small amount I am paying in interest is acceptable to me in return for retaining the cushion in my bank account. If interest rates were higher, that would have changed the game. Everyone's situation and priorities are different and acceptable risk levels are different. I gambled on my car staying reliable another 2 years and lost, but it's ok because I still have my Dually as a backup. LOL |
|
| |
|
Meanest Teacher!!!
Posts: 8552
Location: sunny california | I don't agree a 100% on not financing fun. I think some people get into trouble from just going overboard. I kinda have a policy about credit cards. If I can't add a zero on the end of the minimum payment then the balance is too high. I don't keep balances that it would take more than 3-4 months to pay off. I am just not going to cancel my vacation or not barrel race because my truck needed $2,500 in repairs, so that can go on the card. the vaction/racing is cash though...
I did finance a trailer but I could add a zero to the payment if I chose to. so i don't really feel all that burdened by it.
|
|
| |
|
 Good Grief!
Posts: 6343
Location: Cap'n Joan Rotgut.....alberta | I wouldnt have a pot to **** in if I didnt finance.......my bank financed my barn just fine.....M |
|
| |
|
Elite Veteran
Posts: 612
| Financing a barn is not the same as financing other parts of a hobby. A barn will add value to your property, just maybe not as much value as the cost and in some cases is a necessity. (We only had a small lean-to.) We refinanced our house to build the barn. We refinanced again a few years later because interest rates dropped. We have the same house payment for less years. |
|
| |
|
Extreme Veteran
Posts: 300
| The company our barn supplies were bought from offered a 1yr 0% interest loan. It ended up being through wells fargo, which I have never banked at. So it is possible to go other routes instead of home equity.
And I also have to slightly disagree with Bigfoot. People borrow $$ all the time from banks for hobbies. Boats, snowmobiles, four wheelers, motorcycles. Its about being responsible in not borrowing too much and paying off your debt. |
|
| |
|
Duct Tape Bikini Girl
Posts: 2554
| Hmmm....never finance for hobbies. I take it you didn't major in education. Sorry, I would have absolutely NOTHING without the option to finance! I am proud to say my husband and I, both RICH teachers, have a home, 3 acres, two trucks, a horse trailer, and a barn. YES, they were all financed, and paid for completely. It is possible. Never give up.  |
|
| |
|
Elite Veteran
Posts: 1074
| I agree. You need to be reasonable with what you finance, but financing isn't evil. If you don't have to finance that's great, but don't make others feel bad because they went to the bank and borrowed money. Everything needs to be within reason, and if you can afford the payment, then go for it. It's no one else's business anyway. I know of several people that have financed barns. Some have done it with a home equity loan and some have financed the actual barn. |
|
| |
|
 Baby Blue's
Posts: 7304
Location: Texas | TACKyPaints - 2015-01-17 9:33 AM We are hoping to build a barn this summer/fall too. My husband went and talked to a local bank and they basically said the way they do it is by doing a home equity loan. So we'll have to have our house appraised and then whatever amount OVER that it's appraised for is the amount we can borrow. So if a house was bought for 100k, but appraised out at 150k, then you would be able to borrow 50k. That's how they explained it to us.
I'm pretty sure home equity loans will lend at 80% of the appraised value. I've never had one but in your example, you would receive $20,000 since 80% of $150,000 is $120,000.
As to the financing of the barn, I mean, you gotta do what you gotta do. Just last Saturday we paid cash for a barn to be built. I was grateful because when you pay cash, you spend much differently than if you're financing but at the end of the day, you have to have a barn. We live in a VERY mild climate but watching our horses get rained on for 6 months was not fun.
Like anything, I'd always advise getting only what you need. The average horse trailer on the road is ridiculous (the purpose for 90% of the ones on the road are to get from point A to point B) and it depreciates! More than likely, a barn will not increase the value of your property dollar for dollar - especially if you go over the necessities that a barn actually provides (storage and shelter). |
|
| |
|
 Midget Lover
Location: Kentucky | We financed our barn through a home equity loan. We live in horse country, so although a barn doesn't add monetary value to our house, it will beat out a comparable piece of property with no barn.
We have very, very little debt, so taking out this loan didn't stress me out. |
|
| |
|
 Warmblood with Wings
Posts: 27846
Location: Florida.. | I have never financed either.. paid for a morton barn which I love and highly recommend.. but it didnt add much to property value.. so dont count on that..
nice barns are great!!
do whats needed but keep it within your own limits.. |
|
| |
|
 Worst.Housekeeper.EVER.
Location: Missouri | Murphy - 2015-01-19 9:33 AM We financed our barn through a home equity loan. We live in horse country, so although a barn doesn't add monetary value to our house, it will beat out a comparable piece of property with no barn.
We have very, very little debt, so taking out this loan didn't stress me out. I was surprised by this when we started the process of building our home/barn.
We ended up doing separate loans so that we could get the house on the secondary market without the hassle of including the barn.
I PMd the OP with our lending options. Don't get discouraged! It's a headache getting started. Hope it works out! And, remember to post pics!!!!!
Edited by just4fun 2015-01-19 10:00 AM
|
|
| |
|
World 4D Champ
Posts: 28264
Location: PA | Thanks everyone for the options!! Many different avenue to look into! |
|
| |
Financing a barn...