garage finances.

[rubberrodder]

Trying to find options for financing my garage build. I looked at refinancing the house, but the fees eat about 25% of what I want to borrow. I don't have any credit cards to max out, nor do I want them. I am checking to see if my home owners insurance would kick in since they would be covering a much safer building.{Other than a drop in my premiums I don't think so. But, it was the wife's idea.} Contractor financing? Signature loans? Polish Quido "the shark"s limo for 20 years? How did you guys Finance your dream?

 

[Jack Olsen]

I hate to sound like grandpa, but: my advice would be to save up.

In most cases, a garage will not add significantly to a property's value. And a solid rule of thumb is to never borrow money for hobbies or fun stuff. Borrow for a house, but try to pay as you go for everything else.

 

[crewchief888]

I hate to sound like grandpa, but: my advice would be to save up.

In most cases, a garage will not add significantly to a property's value. And a solid rule of thumb is to never borrow money for hobbies or fun stuff. Borrow for a house, but try to pay as you go for everything else.

^^^ agreed

thats the reason why i dont have a bigger garage.


not gonna refi my house, or take out a loan for a "luxury".

 

[Angelfire]

I cash flowed mine.

 

[JakeKohl]

I took advantage of a lower interest rate and refinanced the house with a cash difference...I had a good bit of equity built up. I added four years to my 11 years remaining but my monthly mortage payment actually went down and it got me a little over half way started to build the garage (contractor paid to get it in the dry). Over the course of the next two years, I finished it with cash flow and a good bit of labor on my own.

 

[Kevin C]

Saved enough to self build the basic structure. Used contractors sparingly.

Pay as you go to finish the rest. The rest is sheet rock, insulation, compressed air lines and cabinets.

We could have done a loan but I figured we already owe enough on the house, why add to it? In the long run that was a good choice. If we had taken a second mortgage, we would have had a hard time re financing. That saved me 2X the cost of the garage.

 

[Gary S]

I agree with the previous answers. Save enough to built the basic shell. Build it yourself, and then finish as you save the money. Borrowing makes it cost more than it needs to cost.

 

[jhochst]

save up! You will feel better about it as well. Saved and Planned for 2 years. Now I have a 30x48 with an upstairs. The building is insulated and heated.

 

[Jsf721]

Please read this until it is part of your soul. Debt for luxury items/hobbies or extras is one of the deadly sins of financial independence. IMHO

I hate to sound like grandpa, but: my advice would be to save up.

In most cases, a garage will not add significantly to a property's value. And a solid rule of thumb is to never borrow money for hobbies or fun stuff. Borrow for a house, but try to pay as you go for everything else.

 

[NUTTSGT]

Finances are finances and everybody's situation is different. Some will agree, some will agree to disagree and others will down right disagree.

Seeing how you figured that 25% of what you would borrow would be ate up in fees, don't borrow against your home. This would lead me to believe have only been in your home a short time or are considering a lending company, not a financial institution like a local bank.

The only way I would recommend borrowing against your home is if you have been there 7-8, maybe 10 years and have equitity built into the home. Also if this is going to be your last home, not something you're trying to flip or only live in 5-6 years. Interest rates are still low but going up.

If you're considering borrowing against your home, also take into consideration the loan interest if you itemize on your income taxes. This may work for some but not for others. I know there are some members that have borrowed against their home to buy a new vehicle, lower interest rate plus a tax deduction. Like I said, everybody's circumstances are different, it may work for them but not for you.

Credit cards. Again, what works for some may not work for others. As long as you are responsible with credit cards, there is nothing wrong with them. BUT YOU HAVE TO BE RESPONSIBLE. You might also find that having one or two and using it occasionally (responsibly) may make your credit rating better, the better the rating, the lower interest rate you can get in the future.

Lowe's, Menard's and HD generally offer a 6 month interest free program on charges of $300 or more. I have used this many times working on the house and garage projects. I consider it (you'll hear businessman talk about this) using other people's money. As long as you pay it off in the required period, it costs you nothing. Again, you have to be responsible.

Contractor financing? Signature loans? Polish Quido "the shark"s limo for 20 years?

No, no, and absolutely NO. Enough said on this methods, the same goes for check advance or payday advance places. . . NO.

If you have a hard time saving the money, consider having it removed before you can spend it. How ? Increase what Uncle Sam takes out of your check, you'll get it back at the end of the year, if you do your taxes properly. Granted, you will not make interest on it but you won't be spending it either.

There is nothing wrong with building your garage in steps or as you can afford it. If you can get it closed in as a shell, it'll make life easier to if you have the skills to do the rest yourself. No skills or need to learn, turn on HGTV, buy a few books, help a friend/family that is doing some remodel work. Sweat equitity, is about the best return on your investment, about the only thing that comes close IMHO, is insulation.


Not that I've said that, you'll see some that agree with it, disagree with it or consider it completely wrong.

 

[Kevin C]

I took advantage of a lower interest rate and refinanced the house with a cash difference...I had a good bit of equity built up. I added four years to my 11 years remaining but my monthly mortgage payment actually went down and it got me a little over half way started to build the garage (contractor paid to get it in the dry). Over the course of the next two years, I finished it with cash flow and a good bit of labor on my own.

This is also a decent option.... If you get the money at 3 to 4%, odds are, your beating the rate of inflation for building costs.

Basically, the up front fees are a big hit. But if you can take your home loan from 5.5% to 4% you may make it up long term.

It cost me $7000 in fees to save $70,000 over the life of the loan. No idea of what your numbers would be.....

EDIT: See above post

 

[Thumper68]

I did the old save up and then build part and then save again for the next step.

The first year I had the 150 yds of fill brought in and leveled.
Year 2 formed up the slab and laid the insulation and in floor heat/pex tubing and poured the 33 yds of concrete.

Year 3 built the rest of it.

Year 4 installed the boiler and off peak elec.

The best thing about doing it this way is that you have no extra payments when it's done. giving you money for the toys to put in it.

I also changed the footprint and overall design between the steps and ended up with a space that's bigger and works better for me.

 

[justanengineer]

Please read this until it is part of your soul. Debt for luxury items/hobbies or extras is one of the deadly sins of financial independence. IMHO

I heard on the radio today that one of our local credit unions is now offering "vacation loans." SWMBO heard it simultaneously and ended up choking on beer bc a rather violent reaction. To each their own tho...

 

[senor fozz]

I heard on the radio today that one of our local credit unions is now offering "vacation loans." SWMBO heard it simultaneously and ended up choking on beer bc a rather violent reaction. To each their own tho...

reminds me of the Portlandia birthday loan sketch.

 

[holdover]

this is only if you plan to stay there. I waited and saved for 33 yrs to build my dream garage, I should have built it in 1977 when I built the house and added the cost to the mortgage. The change in cost of materials over the 33 yrs was alot more than the interest i would have paid. Note I said I built the house, so except for brick work on the house there was no labor involved just materials, I was a contractor. Now I have my dream garage and the clock is running pretty quick at 67. I could have enjoyed it for all those years and could have afforded the slight difference in monthly payment. I have always be conservative with spending, but in hindsight this is something I should have done a long time ago. find a very low interest loan or build it as you get the money and enjoy your garage.

 

[MQ Unlimited Media]

I make a pretty decent income but in no way could I afford to pay cash to finance a larger garage build. I've looked into taking a loan to have one built and some are quite attractive. I guess it depends on the person's personal financial situation to see what would work best. You only live once and why build a structure that will take +1 yr to build when you can have it completed in just 2-4 months in most cases.

I'd pay it off early though.

 

[Kevin C]

reminds me of the Portlandia birthday loan sketch.

Nice to see a someone that likes Portlandia.... At times I feel Like I'm directly being made fun of. A good trick would be to get them to use my new garage for one of their scenes.

They were shooting on my street this spring, fun to see whats involved. The dog down the street was used for one sketch.

Funny stuff.

 

[Goobzilla]

Lots and lots of OT worked for me. Good luck in your quest.

 

[KPSquared]

It sounds like you don't have any options for building your garage other than SAVE. You will be happier in the long run.

 

[Falcon67]

We went to *** Pocket Financial for ours.

 

[rubberrodder]

I have to do some kind of financing to get the shell done quickly. The garage was leaning a little when we bought the place 20 years ago. Now it has reached a tipping point and the only thing holding it up is the tire rack in one corner. I quit driving nails when it started making groaning noises 2 years ago. When I empty it out and let it fall the rest of the way down, I am planning on a huge hot dog roast and sing "cumbiya" all night long.
btw, I appreciate all the feed back.
thanks

 

[PhantomEB]

I would like to pay as I go after I move into my next place. But If I can add on 20 to my mortgage, then I may. That would give me a good start to a insulated and powered up shell at least then go as I please.

 

[rubberrodder]

I just need to get the floor and shell done. I can do all the "cool stuff" on a pay-as-I-go basis from there. I am being a reasonably cheap ******* and getting several bids from contractors that other people have used and recommended. So far they range between $23,400.00 to $24,700.00. Including concrete work and permits.

 

[Chevy72pu]

I hate to sound like grandpa, but: my advice would be to save up.

In most cases, a garage will not add significantly to a property's value. And a solid rule of thumb is to never borrow money for hobbies or fun stuff. Borrow for a house, but try to pay as you go for everything else.

Please read this until it is part of your soul. Debt for luxury items/hobbies or extras is one of the deadly sins of financial independence. IMHO

Pay as you go. After my house was paid for in 2006, I had the slab poured and the Metal building erected. Then later added the electrical. Currently adding OSB walls and shelving in 2013. Been using the shop the entire time.

 

[spotco2]

Pay as you go is the only way in my opinion especially with the uncertainty of our economy at this point.

If you borrowed the money and suddenly took a cut in pay or joined the unemployed, how are you going to make the payments if you borrowed the money to build it?

 

[Dale Leeds]

I agree with Jack Olsen. Save your money.

 

[hh76]

I have to do some kind of financing to get the shell done quickly. The garage was leaning a little when we bought the place 20 years ago. Now it has reached a tipping point and the only thing holding it up is the tire rack in one corner. I quit driving nails when it started making groaning noises 2 years ago. When I empty it out and let it fall the rest of the way down, I am planning on a huge hot dog roast and sing "cumbiya" all night long.
btw, I appreciate all the feed back.
thanks

Not to judge you too much, as I don't know your financial situation, but if you knew that the garage was falling down for 20yrs, and you couldn't save up for a new one during that time, you need to take a look at your budget to make sure you can afford the new payments.

 

[dbonne]

I saved $200 a month for over 10 years and took out a 5 year loan out of my 401K to be able to build my dream shop. 10 years ago I was nearly at the point of bankrupcy without a pot to piss in. $50 a week is not a lot, but adds up over time. I have been driving the same paid off vehicle and living well inside of my means, now saving money comes second nature. Whatever you do, stay focused on the goal and you will get what you want!

 

[BRENT in 10-uh-C]

I kinda feel for the OP wanting to build a dream garage, as I am in a similar situation needing to build a new shop(s) that I can build equity in (currently leasing). Before the present administration changed the banking rules, I could have borrowed the construction costs with 10% down. Now my bank will only finance 80% of the appraised value or the sales price (whichever is the least amount!!) --and they require 35% down on vacant ground. This is factored on me having over 700 credit score and an average daily balance of $10k in their bank.

My personal problem is I need a building of 10,000-12,000 square feet which will equate out to somewhere around mid-to-upper $300k. I have some saved up but coming up with $75k-80k is where my struggle is. Half is doable. My fear is that at some point, inflation will hit and building costs will increase by 30%-40%. Just like others have mentioned, locking in on a lower interest rate with cheaper building material prices may be more financially prudent than saving up the money.

 

[mikefromme]

I have to do some kind of financing to get the shell done quickly. The garage was leaning a little when we bought the place 20 years ago. Now it has reached a tipping point and the only thing holding it up is the tire rack in one corner. I quit driving nails when it started making groaning noises 2 years ago. When I empty it out and let it fall the rest of the way down, I am planning on a huge hot dog roast and sing "cumbiya" all night long.
btw, I appreciate all the feed back.
thanks

Well don't tell your insurance company! They'll cancel your policy unless you have it torn down.

If it falls in one catastrophic act of god though you'll have a pretty good settlement check to replace it with.

 

[Conner]

I kinda feel for the OP wanting to build a dream garage, as I am in a similar situation needing to build a new shop(s) that I can build equity in (currently leasing). Before the present administration changed the banking rules, I could have borrowed the construction costs with 10% down. Now my bank will only finance 80% of the appraised value or the sales price (whichever is the least amount!!) --and they require 35% down on vacant ground. This is factored on me having over 700 credit score and an average daily balance of $10k in their bank.

My personal problem is I need a building of 10,000-12,000 square feet which will equate out to somewhere around mid-to-upper $300k. I have some saved up but coming up with $75k-80k is where my struggle is. Half is doable. My fear is that at some point, inflation will hit and building costs will increase by 30%-40%. Just like others have mentioned, locking in on a lower interest rate with cheaper building material prices may be more financially prudent than saving up the money.

It wasn't really that the government changed the rules. The banks have just tightened up their lending standards pretty significantly after getting burned really bad in the mortgage crisis.

 

[BRENT in 10-uh-C]

It wasn't really that the government changed the rules. The banks have just tightened up their lending standards pretty significantly after getting burned really bad in the mortgage crisis.

Well you may be right but that is not what I am hearing and been reading for the past few years.

Evidently the banking industry was deregulated back in the late 90's but in 2010, the present administration created the Dodd-Frank Act that has totally (i.e.: foolishly) re-written the rules by which banks and lending institutions must follow if they want to do business. Therefore like you say, banks have tightened up their lending practices and must follow much more stringent guidelines however it isn't because they are choosing to do so, ...its because Obama said they must or lose their license. I pretty much take that as the government changed the rules.

 

[polexican23]

What a minute, you want an easy way to finance this garage build. Spend $500 on **** box car. Tamper with the brakes a bit so they dont work so well. Let the wife park it in the garage.

Hello NEW garage covered by insurance. Both car and home owners.

You are welcome.

 

[6768rogues]

Yea, what Jack said.

 

[rubberrodder]

The kids are FINALLY grown and gone. Now I have a bit of usable but not disposable income. The situation is the garage wont last long enough for me to save that kind of scratch. When I should have done it, I had two extra bodies to feed and clothe. Now I need to do something real soon or I will be posting on the "Guys without a garage" thread. Just getting the shell is the priority.

 

[Blk88GT]

I'm surprised at the number of people here that are a) loaded or b) expect to live forever.

The bank has plenty of money with ridiculously low interest rates. You could be dead in 5 years. Why wait your whole life for something you want? Life is short and there's no luggage rack or trailer hitch on a hearse.

With that said, there is a fine line between reckless and prudent when it comes to borrowing money. Only you can decide which path to choose!

 

[atfulldraw]

We don't borrow money, however, I do make a good bit on the side by making high risk loans to people who think they have to have what they want, when they want it

I paid cash for my barn, will finish about half of the slab now, and the rest when the wallet is full again.

Don't forget that it isn't just the cost of the barn -- human nature requires you to buy lots of new stuff to put in it as soon as you build it.

 

[Chevy72pu]

I'm surprised at the number of people here that are a) loaded or b) expect to live forever.

The bank has plenty of money with ridiculously low interest rates. You could be dead in 5 years. Why wait your whole life for something you want? Life is short and there's no luggage rack or trailer hitch on a hearse.

With that said, there is a fine line between reckless and prudent when it comes to borrowing money. Only you can decide which path to choose!

I don't know about the others of which you speak. I am not loaded. 61 years old and still working 40+ hours a week. Still saving for retirement. I do plan to live forever, but the only thing I hope to take to my heavenly home is my family.

 

[e-tek]

HOLY ****! Is this thread FOR REAL or is it a SPOOF????? Who the hell saves to build a garage??? Likely very few people.

Jack, your garage is ATTACHED to your house right? So unless you paid CASH for your house, I'm guessing you borrowed for it. Of course if you DID pay cash for your house, then you're one lucky ******!

Financing is NOT a dirty word folks! It's how people get to use things now, how anyone gets anywhere and how the rich get richer. Would it be nice to pay cash for everything - it might. Still doesn't make it right - or even the best option - in many cases.

The best thing I've learned over my years is the term "Mortgage Broker". If you have a decent income and especially if you have 2 incomes, then they get banks to COMPETE for your loan business. When I built my 1000 sq ft shop we went through a mortgage broker where I re-negotiated our house loan, plus the $30K shop loan at 2.15% (for real) and now we will end up paying LESS overall vs our previous loan that was at 4.25%. And the next 3 times we came up with $30-40K we sure as hell didn't pay down our home/shop loan - we bought rental properties.

Anyways, I hope my comments bring an air of REALITY to the suggestions you've been getting.

 

[Scott r c]

I have gotta disagree with E-tek. Rich get richer earning interest, not paying it out to someone else. Saving up is not that difficult if you want it bad enough.