Financing your build?
- Thread starter KNOTHEAD
- Start date
kd3pc
Well-known member
cash on the table for my 24x24...I still need to insulate the ceiling and install OSB, saving up for that now, hope to do it in the fall.
Just too much **** to deal with a loan and the approval/processing. The "rules" have changed so much in the past 5-8 years, you need a lawyer to make sense of it.
Each bank is different and has their own interpretation of the rules. All the money you plan on telling them about and using, must be "seasoned" and have a paper trail to show where it came from. Don't move a penny, until the bank tells you, else that money will be questioned, no matter it's source. In my case $30K was deemed not "seasoned" since I cashed out some stock and transferred the proceeds to my bank. It could not be counted in the application. Painful to say the least.
All the best, and all I would add, is the bigger the bank, the more chaos that will be in the process.
Just too much **** to deal with a loan and the approval/processing. The "rules" have changed so much in the past 5-8 years, you need a lawyer to make sense of it.
Each bank is different and has their own interpretation of the rules. All the money you plan on telling them about and using, must be "seasoned" and have a paper trail to show where it came from. Don't move a penny, until the bank tells you, else that money will be questioned, no matter it's source. In my case $30K was deemed not "seasoned" since I cashed out some stock and transferred the proceeds to my bank. It could not be counted in the application. Painful to say the least.
All the best, and all I would add, is the bigger the bank, the more chaos that will be in the process.
I paid cash all the way! I mowed lawns, did odd jobs, whatever I could do to save money. (I wish I was better looking I could have made the $$$ faster other ways)
But now its done and its all paid for.....
Cash is king!!!
Sent from my XT901 using Tapatalk
But now its done and its all paid for.....
Cash is king!!!
Sent from my XT901 using Tapatalk
benjamintmiller
Well-known member
401(k) loans aren't all they're cracked up to be. Sure, you borrow money from yourself and pay yourself back interest, but there are a few important caveats:
- You borrow pre-tax money and pay back post-tax money. The principal balances are the same and even out here, but the interest you pay to yourself is taxed when you earn it and taxed again when you retire.
- If you quit your job or lose it for any reason, you must repay the amount borrowed in 60 days, or you have a taxable event. As you're not retired, this means you now must pay taxes for the amount you borrowed, plus a penalty excise tax of 10%. This can really, really screw you if you change or lose your job for any reason.
- The money you take out is no longer invested in stocks or bonds, so it's not earning you anything.
My 401(k) last year grew 28%, and over the last 75 years, investing in index funds would net you about 7%. If you have good credit or home equity, you are almost certainly better off financially borrowing money from a bank.
If you're determined to borrow money to build a shop, a home equity loan is probably the best choice because you can usually get a very good interest rate, the shop raises the value of your property in the event you need to sell, and the interest you pay is probably tax deductible.
coljar
Well-known member
I borrowed about 3.5% from my 401k to build my garage and paid it off early. At the time, I had other investments that had my money ******* which paid off a lot more in the long run compared to how much I would have made in the market.
KCarGuy
Well-known member
Nope.
Sold an Old Corvette to Finance my new Garage build.
At the time I have 5 cars, and 2 were stored at a Friends Morton Building.
(traded a Motorcycle for the Corvette 5 years earlier)
(Bought the Motorcycle for $6700)
So...I guess my 25'x30' garage cost me $6700...
Sold an Old Corvette to Finance my new Garage build.
At the time I have 5 cars, and 2 were stored at a Friends Morton Building.
(traded a Motorcycle for the Corvette 5 years earlier)
(Bought the Motorcycle for $6700)
So...I guess my 25'x30' garage cost me $6700...
countryroad82
Well-known member
I painted a lot of cars in a dark, dirt floor shed that had 1 light. When I painted I had a paint gun in one hand and a trouble light in the other. Paid cash for my 30x50 concrete and all there are plenty of things I still need to do but 13 years later I'll finish it up one of these days!
Playwme
Well-known member
My wife has a high paying job. I build all the stuff she wants and she pays for my garage.
jb3
Well-known member
I plan to work out of the home (as a base for my work van and office), moving the business from a commercial condo, and the scheme it to make improvements to the beat down old garage available via business reasons.
So basically, my business will pay for it and I can take a tax deduction, and me tinkering on personal projects in there is just gonna be an unexpected bonus.
So basically, my business will pay for it and I can take a tax deduction, and me tinkering on personal projects in there is just gonna be an unexpected bonus.
Falcon67
Well-known member
Some sale proceeds of ex-home plus mostly *** pocket.
jomobco
Well-known member
I like your math!
Angelfire
Well-known member
Paid cash. No way I'd finance a garage unless maybe it was for a business. But I'm one of Ramsey's nuts that only pays cash for everything. Only loan I have is the mortgage which I'm paying extra every month against the principle.
Notgrownup
Well-known member
Tax refund for most of concrete and sold the wife's Harley for the 24x24 kit. Will insulate and finish as I go
Cash.
I've done my entire shop without financing. I put the exterior up one year, then each subsequent year made progress on the inside.
Took me about 7 years to completely finish it off but it was worth it to not carry any debt.
Good luck to you no matter how what path you pick, just do it.
I've done my entire shop without financing. I put the exterior up one year, then each subsequent year made progress on the inside.
Took me about 7 years to completely finish it off but it was worth it to not carry any debt.
Good luck to you no matter how what path you pick, just do it.
Winning!
sands35
Well-known member
Cash.
IMHO, financing a garage isn't a great idea. They typically don't add enough value to your home to pay for it if you sell.
If you can do something like tomshep, then great. (But then mortgage rates have been low for so long, if you are still paying over 5-6% interest, you need to take a personal finance class.
)
IMHO, financing a garage isn't a great idea. They typically don't add enough value to your home to pay for it if you sell.
If you can do something like tomshep, then great. (But then mortgage rates have been low for so long, if you are still paying over 5-6% interest, you need to take a personal finance class.
)rburke65
Well-known member
I wrote the check. Wife and I .... no children .... Worked and saved. So when I retired, it was time for me to 'just do it'.
uniballer
Well-known member
5,500 cash and had pole barn up, not count concrete or metal siding and roof.
I just watched, then the metal was on me. Concrete cost more because of the incline of land.
I just watched, then the metal was on me. Concrete cost more because of the incline of land.
Kevin54
MEMBER EMERITUS
I'm going to do a refinance on the house to add on to my garage. We have 4 years left on the house, but are going to refinance for 10 years. My interest rate will go from 4 5/8% down to 3 1/8%. Altogether our house payment will drop $400/mo. from what it is now. And if I keep paying what I am paying now, the extra $400 will come directly off of the principal. That would be $4800/year off of the principal.
So in paying the extra $400/mo, shaves 4 years off of the loan, so really I will be paying what I am now but only for 6 years instead of 4 years.
So in paying the extra $400/mo, shaves 4 years off of the loan, so really I will be paying what I am now but only for 6 years instead of 4 years.
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waterss
Well-known member
Paid cash for it. Saved up for the concrete. Took another 3 years of saving before we had enough to put up the building. Saved and side jobs for 2 more years helped to finish the inside. Just now starting to put the finishing touches on some parts of it but a little more to go on other parts. In the end we owe nothing on it.