Need advice from a property appraiser

[JMER817]

There is good debt and bad debt...taking a loan on a home that should appreciate over time and where you can write off the interest while you make a nice return in your CD makes sense to me.

 

[Zerk]

Most people do not understand what deductions are. You pay 10k, and get 2.5 back.

It is best to have no deductions.

As far as being normal to use your house as a piggy bank, lots of people learned a lesson on that.

You are making money, but have to use credit cards. With the money you are making, if you were not a normal American, you could just pay for this.

A study was done. 100% of foreclosures had mortgages.

You should check out Dave Ramsey.

 

[Zerk]

There is good debt and bad debt...taking a loan on a home that should appreciate over time and where you can write off the interest while you make a nice return in your CD makes sense to me.

There is no good debt. The debtor is slave to the lender. You could pay your house off, and invest what was mortgage payment.

Full disclosure, I do have mortgage and 850 credit score. I hope to he successful enough that it goes to zero.

 

[Zerk]

Ignore lists are for chicks.

 

[lennyzx11]

I am assuming your being funny......

In any case the barn is for my wife to have her own space, take care of her horses and any other projects she does. Like what my shop is for me. The porch is more for me because in the early morning and in the evening I like to sit outside as opposed to watching TV.

I spoke to the lender today and his suggestion is a Homepath Reno mortgage as it takes into account the after completion value of the projects. After completion refinancing out and into a conventional to get rid of the PMI. The big kick in the N*ts with this is the combined $12,000 in costs and fees with the two mortgages.

He also said that the barn would probably yield me more in value as the appraiser would have to assign value to that based on structure type and quality. Further that the porch would be assigned based on square footage no matter if it was made out of Italian marble or old pallets. But that neither would yield me any great amount of equity in the short term. I am going to see him at the end of the week to look at the options a little harder and see what we have. thanks for the input thus far.

Addressing this ONLY from a value of life standpoint.
Build the barn first. Then she gets to do her thing. You say you have your shop and sitting outside can be done anywhere on your property.
My personal idea would be to get loan for barn, and contract it to be built. Meanwhile a couple hundred bucks as you go start building a deck/porch yourself. You can be working on it or sitting "outside" staring and brainstorming on it enjoyably for quite some time. Ledger board or pier block foundation one weekend, then frame, joists, flooring etc. just a little at a time cash and sweat equity. A piece of plywood or OSB makes a walkway over the joists to the front door temporarily just fine for a while till decking money comes in.
This way you get both. Probably completed within 3 months easily I would think.
Raising a barn is intimidating but building a porch can be handled by someone that makes rustic furniture like your profile says easily I believe.
Don't screw with "old man money" now (or any foreseeable time). There's a chance of upcoming issues regarding these in our lifetimes I believe.
Lenny

 

[TheMan419]

There is good debt and bad debt...taking a loan on a home that should appreciate over time and where you can write off the interest while you make a nice return in your CD makes sense to me.

Depends on cash flow, the rate on the CD and the rate on the home loan. If you are making 1% on the CD and the home equity loan is going to charge you 12%, then no... crack the CD. Of course if the CD is all the liquidity you have then cracking that might not make sense. Lots of moving parts there to make the decision.

 

[BigCountry1689]

I already used a CD to build my shop so I don't want to use another one, though the thought had crossed my mind previous to my in-laws suggesting their bank. I keep those as a "What if" so in the event that I have a catastrophic incident I have back up money. The Refi that I got pre-approved for from Trustco has an interest rate of 3.75%, and with pulling the money out ($55,000) I am only increasing my mortgage by $65 because I will be dropping the PMI of $160 a month and reducing my interest rate from 4.25% to 3.75%, for me $65 is well worth the reward. My long term plan is to make double mortgage payments but that is not possible until my 2 kids start grade school. Currently they both go to private Montessori to the tune of $2100 a month, I do not like having to pay that but I lost that battle to my wife. my oldest starts at a charter school in 1 year so I will divert that money towards the mortgage at that time. So in conclusion I get my porch and she gets her barn and my little world keeps spinning. Thanks to all for their insight and suggestions.

 

[Richard]

Some interesting financial advice being strewn about.

I could probably cite examples where said advice is spot on....and other examples where said advice is dead wrong.

 

[Zerk]

No ****

 

[MossRoad]

If you're going to borrow money, many times a home equity loan is much cheaper than a regular loan or a credit card. That's true. And of course, any time you can refinance a mortgage to a much lower rate, you'll probably save money in the long run if the closing costs are not too steep. By refinancing your mortgage to a lower rate, it'll put more cash available to you each month to spend on other things (like your savings, good schools, etc...). I understand that. And pulling equity from your house to spend on improvements to your house I understand as well.

However, being from a background of my wife and I not ever, not once, despite itemizing for 30 years, having ever beat the standard deduction, even when we had a mortgage, its hard for me to see how its a tax advantage to have a mortgage. You're paying someone taxes or you're paying someone mortgage interest. Either way, you're paying someone else and not yourself. We've been debt free since about age 40. We make average wages. I just don't get it.