Banking

Discussion in 'Hardscaping' started by tthomass, Jan 12, 2009.

  1. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,497

    So, anybody taking advantage of the current financial market? I haven't had the property for 2 months yet and about to refinance from 6% to hopefully 4.5%. At the same time taking out a bigger loan to pay off a few dollars I owe on the my truck and Blue + pay for a renovation in the house + pay for my pole barn etc...........I'll do all that and my mortgage payment will go down about $20 at a 4.8% rate.

    So yes, my loan is bigger but I'm knocking out a bunch of expense I have while maintaining the same mortgage payment. With the rent I'm collecting + $ saving from not paying rent for myself and company.......all I am basically doing is paying on my mortgage vs trucks etc and my overhead is staying almost the same.
     
  2. DVS Hardscaper

    DVS Hardscaper LawnSite Fanatic
    Posts: 6,405

    Years ago I used my home's equity for paying business expenses. Little, peddly notes here and there. NEVER AGAIN. NEVER...EVER...AGAIN!

    Now, using the equity for IMPROVEMENTS to the property - that's a whole different story. An addition, remodel the kitchen, the bath, finish the basement, build a detached garage - I'm all for it

    I have an uncle that owns some new car dealerships in PA and NJ. About a month ago my dad was telling me that 30 years ago my uncle said "never include your home with your business finances", and my dad said "thats advice I have always respected".
     
  3. treemover

    treemover LawnSite Senior Member
    Posts: 404

    But you are paying on your truck and blue for 30 years instead of the short term you had in your oringinal loans. So when you go and get a loan for a new truck in a year or two you are still techincally paying for the first one. This is one of the main reasons our economy is like it is, people buying tins of stuff financed for ever and when they need to up grade the realize how up side down they are. I would not do it unless you really need to.
     
  4. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,497

    Correct, keep home and business separate. Even using the equity line gains lawyers access to my property that is in MY name.

    The additional funds will be deposited into my personal checking account and are at my availability to use for whatever I please as cash.


     
  5. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,497

    I understand what you are saying. My property will be paid off long before 30yrs though that is my note.

    I am consolidating my loans in one view. The International I pay $1,000 a month and my truck I pay $1,300 a month. Here's another way to look at it......in simple terms I'm consolidating them into one loan and dropping $2,300 that I responsible for each month. NOW, yes my principle on my mortgage is going to be higher. I am refinancing for a much lower interest rate which over time is a considerable amount of money. Take that $2,300 for example that I not technically responsible for anymore.......apply it to principle on my mortgage.


     
  6. treemover

    treemover LawnSite Senior Member
    Posts: 404

    Take that $2,300 for example that I not technically responsible for anymore.......apply it to principle on my mortgage.

    that would be a great way to do it, lower interest rate on truck loans and gives you room in cash flow for sh..ty weather or economy. Just have to make sure you do that and not spend it on something else........like toys!!!!
     
  7. EagleLandscape

    EagleLandscape LawnSite Platinum Member
    Male, from Garland, Texas
    Posts: 4,347

    I disagree. Use the equity in house if you have it for loans for your business. But don't use it to subsidize a business that is losing money.

    There is a big difference in wisely using what you have built up, versus overusing something to cover your butt on another mistake.
     
  8. EagleLandscape

    EagleLandscape LawnSite Platinum Member
    Male, from Garland, Texas
    Posts: 4,347

    what was the term on your truck loans? 48 months, 72 months? now amortized over 30 years? its ideal to use the new amortization to get a lower payment, and then pay down the loan faster if there isnt a pre payment penalty. but if you drag that truck through 30 years of financing it would be a bad one.

    www.bankrate.com is my friend. i even have it as a tab in my firefox.
     
  9. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,497

    My business is not failing.......I think of it as positioning myself in the best way for an unknown year. I could be booked till Jun already but that does not grant me anything after that in the construction business. Once I build a patio the customer most likely is not going to call me up an have me build it again out of something next year. Unlike yearly mowing contracts, I can only project what I want to make and to be honest its only a goal with anyone that does what I do and you have to try to reach it.



     
  10. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,497

    Yes, bankrate is good.

    -My loan is a 30yr term, it WILL be paid off before then.

    -Think of the extra $ I'm taking out separate from my mortgage. YES, it is part of my mortgage but think of it, as example, a $100,000 mortgage + $20,000 loan. Together it is $120,000 in debt. I have $120,000 debt regardless if it is ONE loan or TWO loans. YES, its a 30yr note. Here is where the additional $2,300 towards principle goes. I am basically paying, by choice, the same $ if you think of the $2,300 as payment on the $20,000 portion. No other way will I get a 4.5% interest rate on a regular loan.


     

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