the lone
Banned
looking for input on pulling a 2nd mortgage on the house to fund a steel building. thoughts, suggestions.
Pull 2nd mortgage for steel building???
- Thread starter the lone
- Start date
Russian
Well-known member
Pay off your first one.
PinkLinc
Well-known member
I wouldn't do it...
Mercy
Well-known member
Nope. It's a good feeling to own, not owe.
Mercy
Well-known member
Your spendin your own money, for a long time, and more of it. Did you figure what the interest alone would cost you?
cj7365
Well-known member
30x50 metal building from Mueller with some options was $11,000, I wouldnt take a second mortgage, maybe try to barrow from your 401k
You seem sincere in looking for answers...here's what I did.
I went strictly cash. Put the shell up first. Then the doors. etc..etc...
I'd save up enough to get the next project on it done. Got a bonus from work and did the electrical....I would buy insulation a few rolls at a time and put it up. I tried to make consistant progress.
I go out in my shop now and look around and feel pretty good about owing nothing on any of it. Check it out in my sig line.
Now it took me about 5 years to start to finish, but that's ok.
I went strictly cash. Put the shell up first. Then the doors. etc..etc...
I'd save up enough to get the next project on it done. Got a bonus from work and did the electrical....I would buy insulation a few rolls at a time and put it up. I tried to make consistant progress.
I go out in my shop now and look around and feel pretty good about owing nothing on any of it. Check it out in my sig line.
Now it took me about 5 years to start to finish, but that's ok.
djjsr
Well-known member
Second mortgages are never a good idea for anything. They were invented for pretentious people that want to live over their heads.
Stuart in MN
Well-known member
I got a second mortgage when I built my garage, and I paid it off...not that big a deal. Of course it costs more than paying cash, but you know that. Talk to your banker to see what options are available.
Zeke
Well-known member
I agree about paying cash. Can you pay half now? You might find some other financing that is aggressive. 2nds are for 10, 15 years mostly. What about 24 months? If I was in the metal building business, I'd offer short term financing not tied to the property.
I'd just take your first born as collateral.
I'd just take your first born as collateral.
5lima30
Well-known member
I'd say no. When I built my garage (stick built) I paid as I went. Took a little longer but it gave me the oppurtunity to bargain shop for materials (big savings) and when I was done it was paid for with no debt. JMHO.
vfr-rider
Well-known member
I just did a 24X40 metal building for $12,800 and paid cash. I did not want to go into debt to get it built and had to get serious about saving the cash and liquidating things that were not as important to me.
Course, it took me 14yrs to make a shop my top priority. If I had just done a second mortgage it would have been paid off by now but I would have spent a lot more money. You have to decide what is more important to you.
Course, it took me 14yrs to make a shop my top priority. If I had just done a second mortgage it would have been paid off by now but I would have spent a lot more money. You have to decide what is more important to you.
mmhouse
Well-known member
Save the money and pay cash when you can afford it.
its about to a 10 to 1 ratio in here. as far as second mortgage, theres nothing really wrong about it. who said you had to go the whole term? ive gotten signature loans for 10k to buy classic cars, and 6 months later sell the car for a couple thousand more and pay off the loan and pocket the change. if i can get about 4 of those going right now i can pull it off, but banks are loaning signature loans these days. the key word in the financing is interest. interest vs convenience. thats all it boils down to. the shop i want to build is probably going to cost me 25 to 30k by the time i get electricity and plumbing. thats about half of what i owe on the house. so if i saved 30k cash, id probably be asking myself should i build a shop, or should i keep on going and just pay off the house...........again time vs. money vs. convenience
ive tested the waters on financing from vendors who sell the buildings, but they dont in house finance. they farm it out to banks like capital one, which is the most terrible bank in the history of money. and capital ones interest was like 14%....the ONLY plus side to that is that if you default they cant take your house, atleast not in texas
I just did a 24X40 metal building for $12,800 and paid cash. I did not want to go into debt to get it built and had to get serious about saving the cash and liquidating things that were not as important to me.
Course, it took me 14yrs to make a shop my top priority. If I had just done a second mortgage it would have been paid off by now but I would have spent a lot more money. You have to decide what is more important to you.
14yrs is a loooong time. too long for me. i want to enjoy the building before i hit my 40's lol
cj7365
Well-known member
You asked for suggestions, I gave you one, I did not ask for suggestions about my finances. but because you want to know, when I borrow from my 401, I am paying myself back the finance charge. I don't have a mortgage, and my money has NOT dissappeared
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i agree and disagree. going and buying things on credit cards at 23% interest that depreciate (example electronics) are for people who live beyond their means.......banks are out to make money of course, but in some cases you can use the bank to make you money. i do it every months with my discover card. with their cash back rewards i rack up atleast 800 a month in free cash just by paying my bills on time every month....
Jarhead0408
Well-known member
Personally I wouldn't do it. But out of curiosity what's the intended purpose of this shop?
Fun or business? car restoration? tractor restoration? Tool around shop in general?
Fun or business? car restoration? tractor restoration? Tool around shop in general?
Classic responses. Like all forums everyone here is blessed with both above average incomes and members so of course the advice fits the demographic.
Now, if you're unlucky enough to not be one of the Garage Journal 1%'ers then I say go for the loan if you're confident you know be in over your head later.
There is no second go-around, nothing to save it for "next time", you only get one trip though life so live it while you can. Who knows what shape you'll be in ten years from now, build now and enjoy your garage while you can.
Now, if you're unlucky enough to not be one of the Garage Journal 1%'ers then I say go for the loan if you're confident you know be in over your head later.
There is no second go-around, nothing to save it for "next time", you only get one trip though life so live it while you can. Who knows what shape you'll be in ten years from now, build now and enjoy your garage while you can.
slip knot
Well-known member
Why not re-fi the whole mess. I re-financed my house when interst rates began to drop and built a 36X50. Financed it for 25 yrs but have been making double payments on it and it'll be paid off in 47 payments. We decided to take a longer note out "just in case" and figured we could pay it out with one income but since we have two incomes we make two payments. My .02 worth!
arktraveler
New member
- Joined
- Nov 19, 2011
- Messages
- 2
Have you thought about a home equity line of credit? It is a great product if used correctly. A person can spend cash they would normally save for emergencies knowing the line could be used if the emergency occurs. Most payment schedules call for 1.5% of the monthly balance to be repaid each month. When you get it paid off you can leave it I place for emergencies.
Interesting timing, as I am in the middle of doing just this. We built our house on 2.5 acres in 2003. We built the house we wanted, did the pool and everything we wanted, on a 30 year note. We didn't do a shop, even though I really wanted to do one for the entire 23 years we've been married! Now, the interest rates have come down so much, and our property has appreciated to the point that we thought we should look at refinancing. We went to our credit union, and ended up with a refinance that took the house note down from 21 years left on a 30, to a 15 year note, for $87 a month increase. At the time, we asked about doing something for a shop, and they had several suggestions. We waited about a month for all the paperwork to clear, then, since we had a current appraisal, we did a Home Equite LOC, but it is a term LOC, for 5 years. There is a 39 x 54 x 14 with 2 10x12 OH doors and 1 16x12 OH door, radiant floor heat and a 2 post lift going up in the back yard right now. They finished all the framing, roof and wainscot are on, finishing up next week on Tuesday. Obviously, I say do it because I did, but that's what worked for me. I understand "no more debt", but going a round with cancer at age 43 taught me that now is pretty important too, not just down the road! Good luck with your decision, cheers!!
djjsr
Well-known member
Here's a heartwarming second mortgage story for you .........
A guy I know married a somewhat younger woman. The day after the wedding, she turned into a *****. She said she wanted a bigger house. He said he couldn't afford it. She said she didn't care, borrow the money.
He did.
Months later, she said she wanted a bunch of new clothing, jewelry, furniture and a new SUV. He said they couldn't afford it. She said she didn't care, borrow it.
He did and took out a second mortgage.
After a few years, she files for divorce, gets all the stuff that he's paying for and has her new boyfriend move in.
The End.
A guy I know married a somewhat younger woman. The day after the wedding, she turned into a *****. She said she wanted a bigger house. He said he couldn't afford it. She said she didn't care, borrow the money.
He did.
Months later, she said she wanted a bunch of new clothing, jewelry, furniture and a new SUV. He said they couldn't afford it. She said she didn't care, borrow it.
He did and took out a second mortgage.
After a few years, she files for divorce, gets all the stuff that he's paying for and has her new boyfriend move in.
The End.
Sureshot
ALLIANCE MEMBER
I use a LOC secured by my paid for home. It is a interest only loan that I can use at my discretion. I use it for business purposes. If you can make more money off the shop than the interest costs you it may be a go.
The flip side is that building now and locking in the super low rate you avoid the "likely" increases in the cost of building. If in a few years if things get moving your property "may" increase in value at a rate far above the historically low interest rates that you lock in now. BUT you need to be able to ride it out if it doesn't work.
Sounds to me like maybe the refi on all to a long term and bank a big cushion then hammer on the extra payments with all you got. If interest rates escalate well beyond your finance rates taking tax into account you may choose to sit on your cash and make min payments.
What will say a $300 dollar payment look like in 25 yrs? A tank of gas? Half a cart of groceries? Those are the effects of inflation.
You are also aquiring an asset that should be stable to appreciating at the rate of inflation as compared to buying a car that depreciates at 25% of residual every year or there abouts depending on use etc. Will the shop increase the value of your property by the financed amount? If so the idea has merit and could be investigated further.
It is a risk and I do not like debt but used properly it is a powerful tool. If you have the means to pay the bills even in a further downturn or will retain enough equity to be able to unload the place it may be worth considering just be sure you can cover the downside.
The flip side is that building now and locking in the super low rate you avoid the "likely" increases in the cost of building. If in a few years if things get moving your property "may" increase in value at a rate far above the historically low interest rates that you lock in now. BUT you need to be able to ride it out if it doesn't work.
Sounds to me like maybe the refi on all to a long term and bank a big cushion then hammer on the extra payments with all you got. If interest rates escalate well beyond your finance rates taking tax into account you may choose to sit on your cash and make min payments.
What will say a $300 dollar payment look like in 25 yrs? A tank of gas? Half a cart of groceries? Those are the effects of inflation.
You are also aquiring an asset that should be stable to appreciating at the rate of inflation as compared to buying a car that depreciates at 25% of residual every year or there abouts depending on use etc. Will the shop increase the value of your property by the financed amount? If so the idea has merit and could be investigated further.
It is a risk and I do not like debt but used properly it is a powerful tool. If you have the means to pay the bills even in a further downturn or will retain enough equity to be able to unload the place it may be worth considering just be sure you can cover the downside.
Wastedwagesracing
Banned
- Joined
- Nov 21, 2007
- Messages
- 613
It all depends on YOUR situation. I put my building up using a home equity loan. But my place was free and clear of any debt. I needed some debt to keep me coming to the office every day.
I love threads like this....somebody asks for advise. The majority come back with an answer.
The originator of the thread argues and shoots holes in the advise given. Before the thread is over somebody even chimes in and starts bashing the people who gave the opinions.
Sounds like you already know what you want to do so why not just go do it.
The originator of the thread argues and shoots holes in the advise given. Before the thread is over somebody even chimes in and starts bashing the people who gave the opinions.
Sounds like you already know what you want to do so why not just go do it.
You have no clue what any of us make on here dude.
I by no means am rich. It's called living within your means, planning, and delayed gratification. Something most of this younger generation know nothing about.
There is absolutely no cause to attack those that have saved and spent their money wisely.
logical
Well-known member
Nobody could possibly give you advice without knowing your curent mortgage balance, your current home value and you credit rating. A second mortgae is a very general term and one may or may not make sense for you.
If you have a $400,000 house that you owe $200,000 on and want to spend $25,000 on a barn...then just refinance the current mortgage and take cash out. Or if the current mortgage is at a really good rate and you could pay off the barn fast then just take a line of credit against the house equity. If you have a $200,000 house and owe $195,000...then you aren't going to get more out of it. If you have a $200,000 house and owe $20,000...then maybe a second mortgage is a perfectly good idea. If it's a $30,000 house that you owe $15,000 on then I just don't know what to tell you about a $25,000 barn.
If you have a $400,000 house that you owe $200,000 on and want to spend $25,000 on a barn...then just refinance the current mortgage and take cash out. Or if the current mortgage is at a really good rate and you could pay off the barn fast then just take a line of credit against the house equity. If you have a $200,000 house and owe $195,000...then you aren't going to get more out of it. If you have a $200,000 house and owe $20,000...then maybe a second mortgage is a perfectly good idea. If it's a $30,000 house that you owe $15,000 on then I just don't know what to tell you about a $25,000 barn.
djjsr
Well-known member
Hmmmm ............ you're making $800 a month cash back? So you're spending somewhere around $16,000 a month on a Discover card? (5% of 16,000 is 800).
If that's the case, I thiink you're pretty well off financially and sure don't need a second mortgage.
vartz04
Well-known member
Can you do any of the work on the shop yourself?
Figure out what the concrete will cost. If you can get that done without wiping out 50% of your savings get that poured right away.
Rebuild savings and start buying lumber. (if you can frame it yourself this won't take long you can buy stuff week to week even) If you need to hire someone to frame it see if you can find a contractor that will do it and charge you for it in stages.
House is framed and continue saving or buying a little at a time and start putting the sheething up. thats something almost anyone can do with a helper.
continue on with this stuff do what you can yourself. good way to learn how to do things
Figure out what the concrete will cost. If you can get that done without wiping out 50% of your savings get that poured right away.
Rebuild savings and start buying lumber. (if you can frame it yourself this won't take long you can buy stuff week to week even) If you need to hire someone to frame it see if you can find a contractor that will do it and charge you for it in stages.
House is framed and continue saving or buying a little at a time and start putting the sheething up. thats something almost anyone can do with a helper.
continue on with this stuff do what you can yourself. good way to learn how to do things
800 bucks a month would buy a **** load of building materials to build it yourself.
dartsportsteve
Well-known member
To build my garage I'm refi-ing our whole property and pulling 15k out in equity for the garage. The house will be paid for in the same amount of time and it is only costing me an additional $50/month (until my tax assessment gets jacked).
I would have loved to waited and paid cash, but I have no garage and no decent storage for all the outdoor stuff and tools we have. I'm really tired of laying outside working on my stuff in the elements, too.
It was either this or move for me. Moving to a place with the shop I want would cost me a lot more $$.
I would have loved to waited and paid cash, but I have no garage and no decent storage for all the outdoor stuff and tools we have. I'm really tired of laying outside working on my stuff in the elements, too.
It was either this or move for me. Moving to a place with the shop I want would cost me a lot more $$.