Milk Price- Please read Mod note in post #1

Dawggone · 14-02-2016 08:01PM

barnaman wrote: »

have 300k borrowed was 150k and then doubles it to 3 hope build sheds etc this year. at 5.4% interest! Was thinking going to dairying as farm ideal for it had a lad approach me about a partnership but thankfully left it! Farm was in tillage for many many years but went into beef 15 years ago. Father used to drink so whole place was/is knackered nothing done here in years; I was gone to England too.
No choice here with borrowing our banks are screwed annoys me having to pay over the odds in interest.

5.3%.
Is that fixed over the term?

kowtow · 14-02-2016 08:04PM

Depends on the contract, should be ok with a loan governed exclusively by Irish law. Irish law changing back to punt would redenominate euro obligations at whatever the changeover rate was.

But it's not a given particularly with cross border loans. Irish law can't touch a loan under a foreign jurisdiction so you'd still owe in euro and end up paying in punt earnings which might well hurt. There is sometimes but not always a small loophole for land / property obligations.

A euro breakup? Not a high chance in the very short term, but higher than anyone would like to think in the medium term. No amount of political vanity can plaster over the fact that you cant share a currency without sharing sovereignty.

And you can't share sovereignty for ever.

fepper · 14-02-2016 08:05PM

barnaman wrote: »

have 300k borrowed was 150k and then doubles it to 3 hope build sheds etc this year. at 5.4% interest! Was thinking going to dairying as farm ideal for it had a lad approach me about a partnership but thankfully left it! Farm was in tillage for many many years but went into beef 15 years ago. Father used to drink so whole place was/is knackered nothing done here in years; I was gone to England too.
No choice here with borrowing our banks are screwed annoys me having to pay over the odds in interest.

Your lucky you still have the 400 acres to work with anyway

Dawggone · 14-02-2016 08:18PM

kowtow wrote: »

Depends on the contract, should be ok with a loan governed exclusively by Irish law.

But it's not a given particularly with cross border loans.

A euro breakup? Not a high chance in the very short term, but higher than anyone would like to think in the medium term. No amount of political vanity can plaster over the fact that you cant share a currency without sharing sovereignty.

And you can't share sovereignty for ever.

I didn't know that...I always thought that loans in $/€/£ paid in that currency. What about a major devaluation of the punt on exit of the euro?
Would be good business to borrow in euro and pray for a breakup...

The euro as a project is stumbling along...even though sovereignty is gradually being lost...
Explains the rise of extreme right wing politics and nationalism across the EU

barnaman · 14-02-2016 08:23PM

Dawggone wrote: »

barnaman wrote: »

have 300k borrowed was 150k and then doubles it to 3 hope build sheds etc this year. at 5.4% interest! Was thinking going to dairying as farm ideal for it had a lad approach me about a partnership but thankfully left it! Farm was in tillage for many many years but went into beef 15 years ago. Father used to drink so whole place was/is knackered nothing done here in years; I was gone to England too.
No choice here with borrowing our banks are screwed annoys me having to pay over the odds in interest.

5.3%.
Is that fixed over the term?

Add your reply here.

No worse luck! Base of 0 plus 5.4 so if int rates were 5 I would be paying 10.4%!

barnaman · 14-02-2016 08:28PM

fepper wrote: »

barnaman wrote: »

have 300k borrowed was 150k and then doubles it to 3 hope build sheds etc this year. at 5.4% interest! Was thinking going to dairying as farm ideal for it had a lad approach me about a partnership but thankfully left it! Farm was in tillage for many many years but went into beef 15 years ago. Father used to drink so whole place was/is knackered nothing done here in years; I was gone to England too.
No choice here with borrowing our banks are screwed annoys me having to pay over the odds in interest.

Your lucky you still have the 400 acres to work with anyway

Add your reply here.

You are right and I cannot complain but its mad how difficult is make money out of it! Had to do up buisness plans audittted accounts and projected earning over 5 years! Was nothing special when looked at. Asked my advisor about land costs ie that to get me where I am would cost 4 mill. He said land costs are not taken into account in projected earnings! By way farm was valued at 60000/year rental value by bank relied on that too to get the loan.

Dawggone · 14-02-2016 08:34PM

barnaman wrote: »

Add your reply here.

You are right and I cannot complain but its mad how difficult is make money out of it! Had to do up buisness plans audittted accounts and projected earning over 5 years! Was nothing special when looked at. Asked my advisor about land costs ie that to get me where I am would cost 4 mill. He said land costs are not taken into account in projected earnings! By way farm was valued at 60000/year rental value by bank relied on that too to get the loan.

Interesting that your bank values the rent of the property at circa €150/acre p.a....

barnaman · 14-02-2016 08:38PM

yeah and its top quality well over 350 acres of it are. (wood and one wet/rushy bit by a river that could be reclaimed)
That was what the Bank's ag advisor put on it only discovered after first loan was approved. Manager said he had it run past the AIB ag advior for Tipp.

Sam Kade · 14-02-2016 08:41PM

Dawggone wrote: »

Interesting that your bank values the rent of the property at circa €150/acre p.a....

Good tillage land is making €300/acre and over.

barnaman · 14-02-2016 08:43PM

Guessing banks are conservative? 15 year loan so not sure if they price in risk of rents dropping.

kowtow · 14-02-2016 08:44PM

Dawggone wrote:

I didn't know that...I always thought that loans in $/â‚¬/Â£ paid in that currency.

An exit would normally be the reverse of an entrance. Iirc there was a conversion of punt obligations in 2002?

Mind you on recent form our politicians would probably switch to the punt and then arrange for us to pay euro loans in gold or orphan's tears.

whelan2 · 14-02-2016 08:45PM

barnaman wrote: »

have 300k borrowed was 150k and then doubles it to 3 hope build sheds etc this year. at 5.4% interest! Was thinking going to dairying as farm ideal for it had a lad approach me about a partnership but thankfully left it! Farm was in tillage for many many years but went into beef 15 years ago. Father used to drink so whole place was/is knackered nothing done here in years; I was gone to England too.
No choice here with borrowing our banks are screwed annoys me having to pay over the odds in interest.

Did you try other banks ?

barnaman · 14-02-2016 08:51PM

yeah but only 2 avialble to farmers Ulster and BOI. BoI I have a strong dislike for for family reasons. Ulster were ok and would lent same amount but really pressed projected figures. Home id old Georgian place was couple old workers cottages (derlict but roofed still) on land was giving for security Uslter not happy with that wanted greenfield site. Found very very very odd that they not happy with that!

Dawggone · 14-02-2016 08:53PM

Sam Kade wrote: »

Good tillage land is making €300/acre and over.

It's come back a bit Sam.
Potato growers are still strong in the market.

barnaman · 14-02-2016 08:56PM

Oh yeah meant to say Ulster sent a lad out to farm to look at it; AIB did not bother!

Dawggone · 14-02-2016 09:07PM

kowtow wrote: »

An exit would normally be the reverse of an entrance. Iirc there was a conversion of punt obligations in 2002?

We all scored with the conversion rates of punt to euro, although some made poor use of it.

The powers that be could give lessons on genuflection or even, dare I say it, kowtowing.

But then we are the best in class. German class.
I find it amusing watching politicians arguing about 'fiscal space' as millions are wiped off the ISEC.

kowtow · 14-02-2016 09:18PM

Dawggone wrote:

But then we are the best in class. German class. I find it amusing watching politicians arguing about 'fiscal space' as millions are wiped off the ISEC.

Quite.

Fiscal space is the difference between what we're spending now and what we hope the Germans might allow us to borrow in the coming years, net of the payback for the bank guarantee.

They should be cringeing like the rest of us, not crowing about it!

Farmer Ed · 14-02-2016 09:41PM

kowtow wrote: »

Quite.

Fiscal space is the difference between what we're spending now and what we hope the Germans might allow us to borrow in the coming years, net of the payback for the bank guarantee.

They should be cringeing like the rest of us, not crowing about it!

Kind of ironic as we are about to celebrate 100 years of independence we have really lost our independence.
The way they talk about fiscal space, you'd actually start to think it had something to do with a space program. The semantics of it all is very creative to say the least.

keep going · 14-02-2016 10:09PM

barnaman wrote: »

Add your reply here.

No worse luck! Base of 0 plus 5.4 so if int rates were 5 I would be paying 10.4%!

That seems very high , fixed for 5 years qvailable at 4% and varible 3.6.

barnaman · 14-02-2016 10:58PM

As an Agriloan? Mortgage rates at that for sure but not seen any Agri loans that low even though same bloody thing ie loan secured on land.

Farmer Ed · 14-02-2016 11:06PM

barnaman wrote: »

As an Agriloan? Mortgage rates at that for sure but not seen any Agri loans that low even though same bloody thing ie loan secured on land.

The banks are robbing people. Their getting money for nothing and lending it on for a tidy margin. Backing brave my arse. More like robbing brave.

kevthegaff · 14-02-2016 11:11PM

barnaman wrote: »

As an Agriloan? Mortgage rates at that for sure but not seen any Agri loans that low even though same bloody thing ie loan secured on land.

Near templemore barnaman? I am paying just above 2% on loans from 08, loans atm around 5%

barnaman · 14-02-2016 11:16PM

Would plus that a billion if I could. Paying back 135,000 in interest which is plenty and thats if base stays at zero.

barnaman · 14-02-2016 11:22PM

kevthegaff wrote: »

barnaman wrote: »

As an Agriloan? Mortgage rates at that for sure but not seen any Agri loans that low even though same bloody thing ie loan secured on land.

Near templemore barnaman? I am paying just above 2% on loans from 08, loans atm around 5%

Add your reply here.

No Tipp town side of Cashel. What size are those loans? You could have old loans not available anymore as we are recapitilising the banks. Know a lad on tracker mortage that seems to be paying 1 per cent interest on his loan not a chance get one of those these days!

barnaman · 14-02-2016 11:24PM

Just saw last bit around 5 yeah 5.4 which I have seem right then.

kevthegaff · 14-02-2016 11:27PM

barnaman wrote: »

Add your reply here.

No Tipp town side of Cashel. What size are those loans? You could have old loans not available anymore as we are recapitilising the banks. Know a lad on tracker mortage that seems to be paying 1 per cent interest on his loan not a chance get one of those these days!

70k and 50k

frazzledhome · 15-02-2016 12:20AM

My thoughts on bank finance for what it's worth.

You supply the necessary info

You get approval, verbal

Offer documents arrive in the post and most think great I'll sign these. This is the point where people need to pause.

Any offer letters I've received an elephant wouldn't sign. You need to go through line by line, noting any changes you want.

In writing let them know and this is where the real negotiation starts. Some are so delighted with the offer and perhaps due to time constraints sign immediately.

Oh, I almost forgot the dolly bird selling life insurance will also visit for a few signatures.

You do not need to take their cover and in fact in some cases cover isn't actually required. If you do take be sure to get financial advice as if you pop your clogs the bank will get paid but your kin may have phuck all after the tax bill. The folly bird will be paid as that's where your first 1-2 yrs premiums go.

Thread slowly, they will slow things as much as possible to frustrate you into accepting their original offer.

My rule is that they are mearly money shops and like any other purchase one should always bargain and never accept the first offer.

They have teams of spotty graduated who's mother still knots their ties forming letters to drown you in paper.

The negotiating doesn't start till you get your offer letter

kowtow · 15-02-2016 11:03AM

frazzledhome wrote: »

My thoughts on bank finance for what it's worth.

You supply the necessary info

You get approval, verbal

Offer documents arrive in the post and most think great I'll sign these. This is the point where people need to pause.

Any offer letters I've received an elephant wouldn't sign. You need to go through line by line, noting any changes you want.

In writing let them know and this is where the real negotiation starts. Some are so delighted with the offer and perhaps due to time constraints sign immediately.

Oh, I almost forgot the dolly bird selling life insurance will also visit for a few signatures.

You do not need to take their cover and in fact in some cases cover isn't actually required. If you do take be sure to get financial advice as if you pop your clogs the bank will get paid but your kin may have phuck all after the tax bill. The folly bird will be paid as that's where your first 1-2 yrs premiums go.

Thread slowly, they will slow things as much as possible to frustrate you into accepting their original offer.

My rule is that they are mearly money shops and like any other purchase one should always bargain and never accept the first offer.

They have teams of spotty graduated who's mother still knots their ties forming letters to drown you in paper.

The negotiating doesn't start till you get your offer letter

Excellent advice, and you are perfectly right about the personae of retail banks. Ireland was probably the last to convert to this money shop culture (at least compared to US, UK) but we've done it with a vengeance.

Its an odd contrast, when negotiating small / personal loans there is this mad pretence going on that the loan will certainly paid back, because default is a dirty word. As a result contractual terms (90% of which are there to cover default) don't get an airing and often come back to bite the unlucky borrower.

Ironically, on big commercial lending deals the size, term, and rate can be summed up in a 30 character SMS or bloomberg headline. We normally leave them till last. Almost all we talk about during loan negotation is how little we're prepared to risk to the bank as security (if we're the borrower) and how little the bank is prepared to take, or how flexible it's pre-default terms will be in order for it to get the business. We'd often have virtually designed the future bankruptcy of a building or portfolio before we'd shaken hands on the finance of it.

Farmer Ed · 15-02-2016 11:13AM

Some of these msas afectifly mean you have agreed to secure the co ops borrowings also with a guarantee to supply your milk. The worst part is at least one agreement I saw does not just apply to the co op but also extends to any new owner of the co op should it be taken over. Essentially the co op is using the farmer as security with the banks. It's a pity more people didn't read that a bit more carefully before signing.

kowtow · 15-02-2016 11:27AM

Farmer Ed wrote: »

The worst part is at least one agreement I saw does not just apply to the co op but also extends to any new owner of the co op should it be taken over.

Yup, those kind of unequal novation clauses are one of the things that bug me.

Banks always reserve the right to sell the loan asset on.

For the sake of equality, you should reserve the right to sell or transfer the loan obligation on... or in the case of the co-op the benefit of the MSA.

Milk Price- Please read Mod note in post #1

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