Financial Expert / Financial Experience

[hearsay 1]

I have two cars and two large car payments. I also need to add a bathroom to our house. Is it wise to take out an equity loan to help reduce the montly payments of the cars? I know the major down side is the 15 years to pay back the car value, but the average person purchases a new car every 3-5 years.

Anyway, let me know what you think or have experienced.

Thanks.

[Jasman0717 9]

I would recommend paying off the cars first and then do the bathroom. Yesterday the market took a huge hit because of the default on mortgage payments. I would croak if I lost my home at this point in time! You made a good point on financing the car payments to 15 years! Check the interest you will be paying over the next 15 years, it will most likely shock you.

[Hilarious Clinton 452]

Do a google for Dave Ramsey

per him..

Only people with a million dollars in the bank should buy a new car. Buy a 2 or 3 year old car and save thousands.

It's not a good idea to be paying for a car for 15 years.

[William33 110]

Do a google for Dave Ramsey

per him..

Only people with a million dollars in the bank should buy a new car. Buy a 2 or 3 year old car and save thousands.

It's not a good idea to be paying for a car for 15 years.

But then you don't get the new car smell!!! It's so intoxicating...and probably unhealthy... But I like it!!

To the OP, you should consider downgrading one of your vehicles, if the bathroom upgrade is that critical.

Never pull a home equity loan unless it is to improve your house (value) or a matter of life/death.

Why not do the equity loan for that addition and other upgrades, that you can re-capture if you sell?

Edited March 14, 2007 by William33

[Hilarious Clinton 452]

I just saved you thousands!!!

[William33 110]

I just saved you thousands!!!

Much obliged!

[meauxna 15]

To the OP, you should consider downgrading one of your vehicles, if the bathroom upgrade is that critical.

Never pull a home equity loan unless it is to improve your house (value) or a matter of life/death.

er, well, I can think of a few other good reasons.. I took my first one out last year, used the money for a month and paid it back (made a good chunk o' profit, worry not).

But those HELOCs can be VERY tricky--read the fine print several times. Believe it or don't, we got the best deal through Washington Mutual Bank. Contrywide has been invited to drop dead and die.

Get rid of the cars with payments.. I love having no debt! A new bathroom would be way more interesting to me than a 'new' car (I never actually buy new new either). I really wouldn't recommend adding any consumer debt to your mortgage, which is effectively what you're doing with the cars.

[William33 110]

To the OP, you should consider downgrading one of your vehicles, if the bathroom upgrade is that critical.

Never pull a home equity loan unless it is to improve your house (value) or a matter of life/death.

er, well, I can think of a few other good reasons.. I took my first one out last year, used the money for a month and paid it back (made a good chunk o' profit, worry not).

But those HELOCs can be VERY tricky--read the fine print several times. Believe it or don't, we got the best deal through Washington Mutual Bank. Contrywide has been invited to drop dead and die.

Get rid of the cars with payments.. I love having no debt! A new bathroom would be way more interesting to me than a 'new' car (I never actually buy new new either). I really wouldn't recommend adding any consumer debt to your mortgage, which is effectively what you're doing with the cars.

Mo,

Good to see you back!!! With that said, please explain how you made money on a 30 day Equity loan?

Many people reject the notion of buying a new car, yet they are the ones that buy the ever depreciating domestic #######.

Has anyone considered the value retention, of say for example an Acura TL?

In my mind, we only live once. Why not drive the best vehicle that the budget can withstand?

I look for reasons to drive my car.

Ah Honey, did you mention that we need more Thai Chili peppers or coconut milk? No problem, I will be back in 20 minutes... Then it's "zoom" in the ride!!! Good stuff!!

She loves this car also. The most important element!

Edited March 15, 2007 by William33

[meauxna 15]

Mo,

Good to see you back!!! With that said, please explain how you made money on a 30 day Equity loan?

Many people reject the notion of buying a new car, yet they are the ones that buy the ever depreciating domestic #######.

Has anyone considered the value retention, of say for example an Acura TL?

In my mind, we only live once. Why not drive the best vehicle that the budget can withstand?

I look for reasons to drive my car.

Ah Honey, did you mention that we need more Thai Chili peppers or coconut milk? No problem, I will be back in 20 minutes... Then it's "zoom" in the ride!!! Good stuff!!

She loves this car also. The most important element!

Heya Wm, didn't want to leave you hanging over here. I also didn't want to leave the car thing hanging.. that's just a 'family value' I picked up. We all tend to drive our cars to death. My dad has also been known to be a bit brand conscious with his auto choices.... I've been driving Volvos since I figured out I could afford more car than I thought I could if I bought them used. And they're sort of notorious for running forever. We don't know what we'll do next though, because we're already on the last model year that we can bear the look of. There's a local 13 year old who is importing Aussie Land Rovers and converting them to biodiesel.. those sound fun (he's raising tuition for Reed College if you can believe it). Anyway, fun, but not so 'nice' for going to the opera 'n stuff.

My folks did just get a Cooper Mini for a 2nd car (couldn't get a Smart car) so if I play my cards right....

On the HELOC, I had a short term investment opportunity come up, and it was nice to have the use of that money for a short while. I was able to get in, get out & make enough to cover my costs and then some. I heartily agree with you in 99% of the cases tho.. watch that interest; it can really add up fast. I about plotzed when I saw the first payment coupon! I am considering a major upgrade to the bungalow, and wondering if it pencils out to use the HELOC to pay for it. There's always saving, I suppose. (trade travel!?! )

Now, if only I were close enough to come beg dinner off of you guys.. chilis & coconut sounds like a lovely change of pace!