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Corrected the bank on interest today and other general update like items

March 19th, 2008 at 11:32 pm

DH and I refinanced some of our farm loans last month. He has a banker he has worked with since he was in high school and I have one I have worked with for about 6 years now. Both banks want us to bank with them, and with the type of loans we get, the bank basically lays claim to everything on your farm if you default, so each bank doesn't want to fight the other if we default. Both bankers said eventually we will have to consolidate, but we don't have to yet. So, we tried to play one off the other. Didn't work...they both offered the same interest rate. We decided to keep the loans he has through his bank there (land at 6.75%, line of credit at 7%) and keep the loans I have at my bank there (Cattle at 8% and tractor/baler at 8.45%) but refinance.

We refinanced both of "my" loans to 7.25%, but kept them separate, if you know what I mean. My bank charges a loan origination fee of $85 (!) per loan which I thought was normal, but his bank doesn't. But his bank charges $6 a month for a checking account (!). That is going away, for sure.

Anyway, I have a spreadsheet that tracks my loans. That way, if I pay anything early I can track how much I saved by doing it that way. We have 3 yearly payments on each loan. I was putting the new info in today, and on the cattle loan if I pay the yearly payment, I end up paying an extra $98ish by the end. As near as I can figure, the banker refunded the $85 fee on one of the loans, but didn't change the amount due. I emailed him today to see how we should handle that...either a smaller payment this year or a smaller payment the last year or a smaller payment all three years. I know $98 is really a little amount compared to the combined loan total of around $30,000, but hey, I complained about someone stealing $.75 from my cup holder! The payment on the cattle loan is due April 1, so I need to know pretty quickly so I can get the check in the mail.

We sent our tax returns off it seems like ages ago. He owed, being self employed and all, but I got a humongoid refund. Like $8000, from federal and state combined. Yikes! Boy that money would have been better used last year when I was paying for a wedding and we were getting the farm started. But, I got it back already, and it will cover the cattle loan payment due April 1 and his taxes with some left over, which will just go to the general farm fund. This summer, when we have a better handle on what our monthly farm expenses are going to be, we are going to meet with the tax lady and change my withholding. I could guess now, but with all the deductions and depreciate and all, I just want to wait.

The guy we are partnering with told us that we could have 45 cows in the pasture this summer, instead of the 35 we thought. So, we pulled 10 more that are pregnant from my dad (and we'll pay him for the food and other expenses from November - March as soon as he gives us the bill) as well as 8 cows that are either old, not pregnant or trouble makers. DH is graining them every day and sometime in May we are going to sell them. Three of those cull cows have calves, and another one might be pregnant. I hope we can keep the calves and feed them out but sell the cows when that time comes. He might want to sell them as pairs or split them up and sell them.

We are up to 34 calves on the ground, and 14 left to go (? I think that is how many are left). Knock on wood, he hasn't had to pull one (help the cow have it) yet!

We needed another bull, and DH went to a sale on Monday and picked one up. I haven't seen it yet. He said it had good EPDs and was about in the middle of the pack price-wise ($2415). Yet another thing we need for the long term, but a crimp on the funds right now!

Speaking of a crimp on the funds, we bought a swather. An expensive one. It was a good deal, like $6000 less than it should have been. The same farmer traded the swather in for a combine. He is very meticulous about keeping his equipment new-like (oil changes, flushing hydrolic oil, mostly shedded, the clear plastic covering is still on the seat!). We found another one that had 3 times as many hours, was 2 years older, and was $2000 more than this one. Anyway, he traded the swather in and we bought the swather from the dealer for that trade in price. It won't even move 5 miles down the road to "our" place! We did it that way so we could take advantage of the dealer financing - 6.125%. We had to put 10% down and finance the rest for 5 years. We figured that we have to swath and bale around 2000 acres this year to have enough food for our cows, and pay for the tractor/swather/baler. That means the swather is going to be my home for the three days I am not at work so I can swath enough for him to bale the rest of the week when I am not there.

I've read that everyone has a comfort level when it comes to debt. That there is a certain level that you feel comfortable with and if you go over that it really stresses you out. I am inching closer and closer to that. All of the things we are buying will eventually pay for themselves (hopefully...they should, but you never know what could happen). But just looking at the debt obligations is kind of scary.

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