Crawford County, Robinson, Illinois | aintfarminfun - 6/25/2012 23:30 "My logic behind this is that the tractor is losing value through wear and tear and depreciation, whereas the land is gaining value. Seems like I'm losing double on the tractor from interest and depreciation." If everything went in the crapper for a year or two and you didn't have enough money to pay both loans, which would you pay? I would pay the land loan, because in your own words, it is gaining in value, where as the tractor is depreciating. I'm pretty sure that's not what you were asking, but just the way I look at it. I would never want to risk losing the land before a tractor.
Don't fall into the trap that just because the land is paid off means it can't be used to settle another loan. None of us own land, we own the right to the land. Just try not paying real estate taxes for a few years, and see if you still think you own land. Just get involved in a liability case and see if the court will not come after your right to the land and the asset it represents.
Those who say assets are assets are correct, loans are loans, and will be paid back or assets will be lost, whether they are paid off or not.
However, having the land free and clear makes it more difficult to come after.
I always felt better if I was a year or so in front of any loan, and made sure I could make payments ahead and reduce interest before I got the loans.
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Forbearance on mortgage to pay off tractor
