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

  1. tthomass

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

    And should things get rough, I have the option of not having to pay the $2,300 as it is only by choice that I must pay it. I can skip if need be without penalty where if I did that would have banks knocking on my door wanting $.

    I'm simply lowering my responsibility........key word.......and saving interest.
  2. stuvecorp

    stuvecorp LawnSite Fanatic
    Posts: 5,214

    If you are careful with this I don't see the downside, yes you are locked in long term at a low rate and if you are aggressive about paying it down it could give you some extra security. The guys have a good point about not mixing business and personal. Have you asked your accountant?
  3. tthomass

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

    Between my Dad, Brother and me we are the "majority" accountant. The other guy helps us out with taxes.

    Correct, do not mix business with personal.
  4. stuvecorp

    stuvecorp LawnSite Fanatic
    Posts: 5,214

    I will say, I don't always keep things separated. I also understand you are trying to create a buffer in case things are really bad, right?
  5. mattfromNY

    mattfromNY LawnSite Bronze Member
    Posts: 1,581

    One thing to look at before you sign the papers: How much is the refinancing charges/ doc. fees/ closing cost? I ask this because banks, CC's, etc. usually charge a good amount for refinancing.
    When I sold motorcycles at the dealership, we would have people all the time refinancing loans. When it came down to the nitty gritty, they would save a percent, or cut their payment and save (example $500-700 over the life of the loan), but the bank charges $500 in fees up front, tacked onto the loan, to do the refinance.
    Another example, CC companies always offer 'Zero percent on balance transfers', but when you read the fine print, they charge 3% of balance to be transferred as a document fee, etc. ($5000 balance transfer would cost $150, usually charged as a purchase, and added to the balance)
    I know you are a very smart person, and a lower rate on your home/ land has the potential to save you much more than $5-700, but just make sure you read the fine print before you sign.
    For what its worth,
  6. EagleLandscape

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


    I wasnt saying your business is failing. I just threw that out there for everyone that will read this thread that equity in your mom shouldnt be used to subsidize a failing business. It can be used to grow a business.

    i have a TON of equity in my home. I'm talking a ton!! Right now rates are like 4.5 I believe, 25 term, amor over 30 yr fixed. so that means CHEAP CHEAP money.

    I see if this way... two options on how to finance a business. through typical business loans through a financial institution, or through personal loans. currently, i can get better rates and terms using my own personal finances, (especially since my business has only been serious for 2 years, banks dont like that) and come out better at the end (versus using a financial institution.

    example: I've built 4 spec houses in the past year. went to the bank id been with for since i was 13 when I just had a checking account. brought them a business plan and all, needed 250k to build two spec homes, and they said they'd give me 20k.

    told them that wasnt enough, and called around to some adults i knew (i was 21 or 22 at the time) and presented them with the opputunity to invest.
    since then this investor has been more source to build 4 houses, buy a sprinkler company, buy and resell a house in 15 days, and we're about to go at it again to purchase another sprinkler company within 30 days.

    whatever works and fits your business plan, do it!
  7. sprnggrn

    sprnggrn LawnSite Member
    Posts: 73

    I was offered something similar but the closing costs alone were over $8000.00
    shop around if you can
  8. tthomass

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

  9. tthomass

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

    Yes, you are correct. On interest they are telling me 4.75%-4.85% but the market is still dropping. About $3,100ishto refinance, which if I choose to I can even roll it into the loan. The $ will be recovered in 1.5yrs time.

    Staying with the same bank I don't have to go the full route again with a loan as they can use the same "stamp" from the county and not have to go through taxes etc with the county.
  10. tthomass

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

    I understand and also with the banks. My business has only been documented for 3yrs this month.........full time 3yr mark not until Mother's Day.

    I was actually lied to by my banker and I'm seeing what I can do to him about it but none of my equity was available 3 days after closing as promised, even though he knew terms had changed 4 months prior to my closing. I only gave 60% of what the place was valued at 2yrs ago (peak) and my principle loan is only 53% of the current county assessment.

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