Bst way to finance a pole building?

[Arc weld]

Ok, I've decided what building I want based on getting the most bang for the buck. Keep in mind prices are a lot higher in Alberta than other locations. Originally when I talked to builders, most of them said to figure around $25/sq.ft. for a building woth engineered drawings. One builder said about $20/sq.ft. and had a 40x60 for farm use at about $16.20/sq. ft. This was by far the best price. Fast forward and to get a 30x50x14H with 12' door, clear panels for light on the top of the sides with engineered drawings and rafters on 24" centers would be around $35,700. They said there is a price break per sq. ft. when you go to 2400 sq. ft. So to get a 40x60x16H with 14' door, clear panels, engineered drawings and 24" oc trusses would be $42,400. This is way cheaper per sq.ft and is clearly the best bang for the buck.

Now the bank said they would loan up to 50% of the value of the land. I'm looking at financing about $32,000. The bank wants to pay out my existing mortgage with about $24,000 owing and do either a line of credit for $60,000 or do a mortgage with a 10 year amortization. The line of credit would be at 4% and 2 year term for the mortgage would at 2.75%. The county tax assessment on the land is about $80,000 but is always less than the actual value which the bank confirmed. However they still need an appraisal for $400, a $60 application fee and another $345.00 to have the documents written up. WTF is with all these extra charges? On top of this they want a list of all my other assets. I don't get it??? They said the building will add value to the property but it seems like they want 4 or 5 times the collateral of the loan. What's the best to go about this, line of credit at higher interest or mortgage with lower interest? Should I be checking with other banks even though I've dealt with this one since 1978 and have excellent credit. Thanks in advance for your wisdom.

 

[PILOON]

Generally wise to shop around.
And, yes, if you have $5 they will lend you$1.

Few years back I went to renew a mortgage, Boldly displayed was the rate (eg) 4.75%, and when the wrote up the paperwork the rate was 5.25%.
Same bank had charged me $500. to have evaluation made prior to the initial loan.

First chance I had I switched to the RBC, no fees + they paid all notarial charges and the rate was most favorable.

So yes, shop--it will pay off in long run. (switching won't hurt your credit either.)
Naturally a lot depends on your credit rating, assets etc.

 

[buckeyefarmer]

That size barn here except with 12' height cost me around $15k, my labor.

 

[Arc weld]

Well I'm not where you are, 12' foot walls would only allow for a 10' door which would be useless to me, and I like the fact it could be put up by an experienced crew in less than a week once the materials were delivered. I'd love it if I had reliable friends with construction experience that could help me put it up but 9 times out of 10 they're busy when you really need them and then it takes for bloody ever to get finished. I was wondering more about financing and dealing with banks than what someone else paid for a building. Keep in mind car repairs and shop labor rates for most services up here are over $100/hr.

 

[2458n]

Shop for your money. I have a friend who runs a trucking business,50 trucks with 5 more on the way. Roommate in college majored in finance. They both flat out live this rule. At one time John could buy ten freight liners and get one free. They have proven it can be done. You have proven your past dealings do not make a difference to your current bank. Take your good credit score and shop.

 

[pmsmechanic]

I'm thinking that with the oil patch slowed down the way it has in Alberta you might be able to get a crew to put up your building fer a very reasonable price. If your going to shop for a bank you might as well extend that to the builder too.

Just a for your information I built a 30 by 60 building by myself for approximately $8000 in materials. I did a lot of shopping around and bought odd rafters and built the ones I needed to get the length I wanted. I started 10 years ago and still am not finished but I can honestly say that I've built about 85% of the building by myself. A few hours an evening or a Sunday afternoon and slowly I get done.

 

[Arc weld]

I don't want to put a building up over a long period of time. I have a price under $18/sq.ft. to supply and build. Other builders said to figure about $25/sq.ft. so I think I've found about the best deal possible. I don't think the building suppliers adjust their prices because of low oil prices. I think it's more, here's a quote what your building will cost. I liked the guy I talked to which I think goes a long way. I asked a lot of questions and looked at different options and I think he really tried to work with me and cut costs where he could. The engineered drawings he said were around $2400 but he said he could try to get them cheaper which he did, about $2000. Other builders told me the engineered drawings would be 5-$6000 extra. That's a $3000 dollar saving right there. Another builder said about $15/ft. for clear panels along the top of the walls for light. The builder I like is about $7.50/ft. for the same thing. He told me a lower price and then going even lower than he originally suggested I budget. I went with a larger building than I initially wanted because there was a substantial difference in the price per sqft., $23.8/sq.ft. compared to S17.7/sq.ft. $6700 extra for 60% more sq.ft along with a 14x14 door instead of a 12x12 and 16' walls instead of 14' walls. It seemed like a no brainer to go bigger to get the best value. I'm just not good at figuring out how best to deal with banks regarding financing. Do I just take the low interest and go with it or ???? I figure there must be others that have gone through the same thing and could offer some wisdom. Borrowing for a vehicle that depreciates is a whole lot easier and I'm not looking for that big of a loan.

 

[NewfieDan]

Since you asked about financing, we have a Prrsonal Line of Credit(PLC) from our bank. They are available as either secured or unsecured. The rates are usually a percentage point above prime rate for mortgages.

I like the fact one you have one you can always have it. Even if it is paid off, you can still use it. Unlike a loan you don't have to have a reason to have one. The only repayment schedule covers interest only. If you have credit available, you can use it for other things.

You are obviously a welder in Alberta, so if you work some OT you can use the extra money to pay off the PLC early with no penalty.

 

[Tomtint]

Banks have become very savvy with the after sell trick. Kind of like the F&I office after you decide to buy a car. Interest rates are still very low and they can not make points on rate alone ,so they add other fees to pump up the balance sheet. Try your local credit union, they tend to offer better, more customer focused service.

 

[Arc weld]

This was at my Credit Union that I've been dealing with over 30 years. All these extra fee's are crazy. I think the appraisal is a waste of time and money. They gave me a mortgage on the original property and I'm adding more value to it. I'm not working as a welder but work in technical support for welding products. Why they need to know all my other assets is beyond me if they loan up to 50% of the value of the land. Seems like a lot of of BS to go through.