Barn financing?

[bowhntrmatt]

I’m looking to have a barn built for boat storage at my place on the coast. Anyone know the best type of loan/lender to utilize for a project like this?

FYI place is not paid off but have enough equity to cover, but didn’t know if there were better options out there than a refi/home equity type loan.

[chrisgunguy]

I’m looking to have a barn built for boat storage at my place on the coast. Anyone know the best type of loan/lender to utilize for a project like this?

FYI place is not paid off but have enough equity to cover, but didn’t know if there were better options out there than a refi/home equity type loan.

I had take a personal loan at 7% for my shop. Wasn't offered any other options from both places.

[bowhntrmatt]

I had take a personal loan at 7% for my shop. Wasn't offered any other options from both places.

This is kind of what I’ve been led to by my online research. What bank did you use? 7% really isn’t that bad right now.

[BrianL]

Unless you have ag as part of your tax returns, an HE might be the most cost-effective and interest is deductible.

[chrisgunguy]

This is kind of what I’ve been led to by my online research. What bank did you use? 7% really isn’t that bad right now.

United Federal Credit union.

[12RingKing]

Tried capital farm credit? The interest rates are higher than most but the patronage knocks it down considerably.

[bowhntrmatt]

I think I may have answered my own question. I have the cash on hand, but would rather keep it on hand, so most likely I will go for a secured personal loan, which should get me a better interest rate and just use my savings account as collateral. Should be able to have it paid for in less than a year.

[popup_menace]

I’m sure you know this, but you will effectively lock down your savings account until the loan is paid off. You may save yourself some money by booking it into a CD for the term you’d like and set up a balloon payment.

FWIW, I’m a banker and I’d be happy to answer any questions you have.

[Muddy Bud]

Unless you have ag as part of your tax returns, an HE might be the most cost-effective and interest is deductible.

How does this work? I have an Ag exemption for hay. Is the interest tax deductible?

[BrianL]

How does this work? I have an Ag exemption for hay. Is the interest tax deductible?

If you are already doing a Farm profit/loss on your Federal tax return, you might be as well off doing a loan on the barn and adding barn to your schedule, if you don't file a Farm profit/loss but you deduct mortgage interest paid on your 1040, you may want it as a HE, interest paid is deductible just like your mortgage interest.

[TeamAmerica]

If you are already doing a Farm profit/loss on your Federal tax return, you might be as well off doing a loan on the barn and adding barn to your schedule, if you don't file a Farm profit/loss but you deduct mortgage interest paid on your 1040, you may want it as a HE, interest paid is deductible just like your mortgage interest.

Keep in mind that the new tax laws make it to where very few people will itemize their deductions because the standard deduction increased (estimates are 10% or less taxpayers will itemize for 2018). increasing your interest will not always be a tax benefit anymore.

[12RingKing]

Keep in mind that the new tax laws make it to where very few people will itemize their deductions because the standard deduction increased (estimates are 10% or less taxpayers will itemize for 2018). increasing your interest will not always be a tax benefit anymore.

I’ve been tinkering with my taxes this year, and I will itemize easily and I’m sure I have far less to deduct than a lot on here

[TeamAmerica]

Sounds like the OP would be best on a short term personal loan. Even at 7% one year isn't going to kill you on interest.

[TeamAmerica]

I’ve been tinkering with my taxes this year, and I will itemize easily and I’m sure I have far less to deduct than a lot on here

Understand your situation may be different but too many are ignoring this issue when thinking mortgage interest is supercharged so wanted OP to be aware. The 2nd biggest player here is the limit of property tax to $10k. $24k for married couples standard deduction is a lot for middle America.

Dont tell me you are are blowing up trumps tax plan! He said it would only cost $1.5T and that assumes hardly anyone could find more than $24k in itemized deductions! Time will tell...

[Ryanm]

At 7%, why not take a loan against your 401k if you have one? You will pay yourself the interest.

Or if you can pay it off in a year...just put the project off for 6 months and pay cash.

I just hate paying a bank interest if I can avoid it..