I've blogged a few times about our barn renovation project.
We did get a bid from our plumber - $1,400 to dig a 170 ft. trench from the house to the barn, run a water line from the house to the barn, and hook up a hydrant at the barn. The total projected cost is about $16,000.
The first time I blogged about this, a handful of you suggested we have our kids pick up some of the cost, as the renovation is really about keeping their 4-H and FFA projects going. Between the four kids, they have about $7,000 is savings. What we've decided to do is borrow some money from the kids, and pay them back over time at no interest. DW and I both think that's the right thing to do.
We have applied for a loan for the balance of the costs. I hope to hear back about loan approval this week. Here's a Cliff's Notes (do they even use those anymore?) version of our loan.
Some of you who have been here for a while may remember that we took out loans from two family members to renovate our house ago. Even though we have been paying on the loans faithfully each month, it's not a great situation owing money to family members. We would like to get one or both of them paid off as soon as possible. We owe my mother and father-in-law about 17K, and my aunt about 13K.
The loan we've applied for is up to 38K. The original idea was to use that money to pay off my in-laws, and use the balance to renovate the barn, and borrow only what was needed - about 33K - we applied for the loan before we had many bids in for the renovation. The loan would be amortized for either 5 or 6 years, depending on how much we actually borrowed. Paying off one of the loans would also free up some cash flow.
Now that we've had this idea about borrowing some of the money from the kids, it seems to me that we can pay off both sets of family members, and also renovate the barn.
Yes, that will cost us interest, and we will be extending the total loan out longer, but we will feel better having my in-laws and aunt all paid off.
So, for right now, that's the plan.
Barn Renovation Update
October 6th, 2015 at 02:57 pm
October 6th, 2015 at 04:24 pm 1444148667
October 6th, 2015 at 05:00 pm 1444150806
As I see it, the bar resets whenever you re-mortgage and interest scoops up most of the monthly mortgage payment. I hope you'll run the numbers to see exactly what this change will cost you over the long term.
October 6th, 2015 at 06:11 pm 1444155109
At a minimum, one of the loans will need to be transferred over to the new loan, to create more monthly cash flow. As for my Aunt's loan, it can wait.
October 6th, 2015 at 09:00 pm 1444165220