GrainTrader - 1/14/2021 19:41

Let’s say you buy a million dollar farm. To make it “cash flow”, you need about 1/2 down. The bank requires 30% down. So you’ve got a $700,000 loan.

In this scenario, had anyone gotten 2 separate loans, one for $500,000 and another for $200,000. Then you try your best to pay down the $200,000 loan principal as quick as possible with say off farm funds or scraping by or whatever. Then once that’s paid off, your yearly payment on what’s left of the 500,000 is a more bearable number for the balance of the loan...

Getting a $700,000 loan and writing them a check for $200,000 in a few years doesn’t help make the payment cheaper, unless you refi, and that comes with some decent cost at times and it could be that when you refi your rate is higher... (thinking that with the theory of we are about as close to “0 interest” as possible.)