Bst way to finance a pole building?

[bigtiller]

The extra fees are why you can get a mortgage for 2.75%. Enjoy them! I had 2 mortgages in my life one for 9% and the other for 8.5%

 

[buckeyefarmer]

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.

Ok, can't help on the bank part.

 

[Arc weld]

Just send me money instead.

 

[ishiboo]

ow 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.

The appraisal is required because they have to know whether or not the asset is worth what you say it is. Just like W-2s and tax records for proving your income. The other charges are in part how they cover costs, and in part how they make some of their money.

The mere fact they will give you a loan on a piece of land and pole barn is rather amazing.

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.

Shop around, you probably won't find anyone else to do it. Yes, take it and run with it. Anyone is going to want to know your financial situation, have an appraisal, etc.

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.

Well, you may think that... hundreds of years of lending has proven otherwise.

They need to know your other assets as it all figures into the loan for repayment reasons. More assets = lower risk for them. A piece of land with a pole barn is a much larger risk than a house in a populous area. I know you have your justifications why it's not... but it is.

 

[newbury]

Face it even Credit Unions have taken a walk on the safety side.
But still shop around.
I've spent about 40 years with one Credit Union. It was right where I work and gave fair rates. Then about 10 years ago I refinanced a mortgage with another Credit Union which offers rates about 10% lower (4.5% vs 5% for example).

I've since had three car loans and two house loans with them. Excellent credit, always pay on time, etc. Despite that when I just went to refinance again they wanted what I considered an exorbitant amount for the value of the loan. Part of the problem is fixed fees. If I was borrowing $500,000 the fixed fees would only be a small amount percentage wise.

Your only looking for a small amount but they still have to get all the little checkmarks for verifying your assets. And verifying YOUR assets includes trying to ferret out what you haven't told them about, like a second loan on the property.

Good luck.

 

[skylarkguy]

There are numerous web sites and phone apps to compare loan rates. This might help when shopping around. Good luck......of course you could start a crowd funding campaign...but then would have all local contributors wanting shop time

 

[Capricious]

"..And verifying YOUR assets includes trying to ferret out what you haven't told them about, like a second loan on the property...."



I am not sure how things work north of the border, but around here a title search should turn-up any liens on the property.

Reality today is that if you want to borrow money, and you are not extremely wealthy (and therefore not required to document anything) then you are going to get put through the wringer.

At 56 I have decided I do not want to go through the wringer anymore. I no longer owe anything to anyone (other than current credit card charges, which are paid in full each month) and I am not going to borrow money again. Ever.

If I were in your situation, I would do whatever it took to live without this building until I had the cash to get it built. But that is just me.

 

[newbury]

"..And verifying YOUR assets includes trying to ferret out what you haven't told them about, like a second loan on the property...."



I am not sure how things work north of the border, but around here a title search should turn-up any liens on the property.

And hence a $500 charge on a $30K loan or a $500K loan.

At 56 I have decided I do not want to go through the wringer anymore. I no longer owe anything to anyone (other than current credit card charges, which are paid in full each month) and I am not going to borrow money again. Ever.

If I were in your situation, I would do whatever it took to live without this building until I had the cash to get it built. But that is just me.

I believe if you were in his situation you'd be a lot younger. Based on his writing here, he can take great advantage of a good pole barn and it may be a money maker for him.

There are numerous web sites and phone apps to compare loan rates. This might help when shopping around. Good luck......of course you could start a crowd funding campaign...but then would have all local contributors wanting shop time

That's a good idea - my son participated in several of these and only lost a little money. Of course he had anticipated making a fair amount.

 

[jrepp44]

Sorry Arc weld - this is not available in Canada, but it may be of interest to someone in the United States looking to finance a pole building:
http://www.shopsbuilt.com/images/stories/shopfinancing.pdf

 

[Capricious]

"..I believe if you were in his situation you'd be a lot younger. Based on his writing here, he can take great advantage of a good pole barn and it may be a money maker for him...."



Since he mentions that he has dealt with his current bank since 1978 I would not think him too much younger than I.


Another consideration: if he pledges all of his collateral for this one loan, that leaves him with no collateral for any additional borrowing, should that need (or opportunity) arise. In this case, a line of credit in excess of the amount needed for the building MIGHT be a good idea. However, I have seen lines of credit pulled just when one needed them. Plus, it costs to maintain lines of credit.