Home equity loan and C6
10-20-2007, 10:48 PM
#41
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St. Jude Donor '15
"In honor of jpee"
10-20-2007, 10:53 PM
#42
Race Director
With today's rates, if you must finance, you are better off borrowing on the HELOC than taking out a car loan. But it is not something I would do. The danger with the HELOC is that with interest-only min. payments there is a temptation to buy more car than you can afford. Say, a Z06 rather than a regular C6 or nice used C5. People get sloppy in their buying decisions when money is easy.
That is why you see so many on the forum selling their Z06 or whatever 8 months after they bought the damn thing.
Personally, I buy my stuff cash and generally avoid credit altogether, although I have a lot of it available, including a 350K HELOC. If I can't / won't write the check for that amount, then it's just not a wise purchase. Save the credit for a rainy day.
That is why you see so many on the forum selling their Z06 or whatever 8 months after they bought the damn thing.
Personally, I buy my stuff cash and generally avoid credit altogether, although I have a lot of it available, including a 350K HELOC. If I can't / won't write the check for that amount, then it's just not a wise purchase. Save the credit for a rainy day.
10-20-2007, 11:03 PM
#43
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Wow, big acronyms. Good Faith Estimate and Truth In Lending. Impressive.
Reality check: all those people, you know, THOSE people, who "save" hundreds of dollars per month by NOT paying for a car LOAN. Yeah, those people.
How many take that "saved" money and put in a 401K? 1%, 5% of them? You think that many?
That's why I say, and others say, don't do it.
This great thing called the "finance industry", a lot of which is based on smoke and mirrors. And musical chairs.
Remember that one from when you were a kid? Everyone walks around looking happy. And a chair or two is pulled away. And then the music stops.
The music stopped in 1987, October 19, to be exact. The music stopped in 1998. The music stopped in 2000--remember Dot-Com? And finally, most recently, the music stopped in mid/late 2006 in real estate.
To paraphrase, if you learn nothing from history, you are condemned to..... you finish it the way you want. It's your home equity, your potential car, and you can choose to listen to the siren song of the financial "industry." Or not.
Reality check: all those people, you know, THOSE people, who "save" hundreds of dollars per month by NOT paying for a car LOAN. Yeah, those people.
How many take that "saved" money and put in a 401K? 1%, 5% of them? You think that many?
That's why I say, and others say, don't do it.
This great thing called the "finance industry", a lot of which is based on smoke and mirrors. And musical chairs.
Remember that one from when you were a kid? Everyone walks around looking happy. And a chair or two is pulled away. And then the music stops.
The music stopped in 1987, October 19, to be exact. The music stopped in 1998. The music stopped in 2000--remember Dot-Com? And finally, most recently, the music stopped in mid/late 2006 in real estate.
To paraphrase, if you learn nothing from history, you are condemned to..... you finish it the way you want. It's your home equity, your potential car, and you can choose to listen to the siren song of the financial "industry." Or not.
The market came roaring back, you lost if you SOLD, most didn't because WE weren't answering the phones, lol.
1998/2000 what about it? I know people who made fugging killing, bozos held on forever, greed set in.
Real Estate actually stopped in Nov 2005, that was peak. People get greedy, real estate flipppers, whackos in CA who think they can flip house every 3 months and make $150k. No pity party from me.
Most of the Real estate problems today are in 4 states, CA, FL, AZ, and NV. This is where most foreclosures are occuring at rapid pace. People buying homes with Zero down, no reserves in bank, lying about income, etc... I should know, I own a mortgage firm and deal with these bozos on a daily basis.
"Can you refinance my house in Temecula CA, I owe 700k and the house is worth 580k. Sure lady, my lenders love to lose money, they'll give you a loan of 700k to payoff house worth 580k"
10-20-2007, 11:05 PM
#44
Safety Car
Its time for you to refi your HELOC unless you have a pre-payt penalty. Try for a prime, minus something adjustable. Mine is prime 7.75%, minus 1.01% so my current rate is 6.74% (U.S. Bank - unfortunately none on the east coast).
10-21-2007, 07:31 AM
#45
Le Mans Master
Except... Just like my credit card which has a 19.99% interest rate, I don't really care that much about the rate since I don't pay a lot of interest. The credit card and HELOC (and margin) are conveniences, not life support. I never pay a penny of interest on the credit card. I run the HELOC up but then back down within a month or two. Same with margin. The differece between your rate and mine on $50K for 3 months would be less than $200. Since I accept such high interest rates though, the companies love me and lavish me with large rebates and other benefits. And Uncle Sam kicks in his share on the HELOC and margin. But I am never in a position where I couldn't pay it all off in 24 hours or less. It's called living within your means.
10-21-2007, 08:28 AM
#46
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St. Jude Donor '07-'08-'09-'10-'11-'12-'13-'14-'15-'16-'17-'18
There's no way I would use my home as collateral for a car - any car! Either get a regular car loan or wait until you can pay cash.
10-21-2007, 10:15 AM
#48
Melting Slicks
In my humble opinion, remember it is ONLY a car. You house will normally appreciate in value while the opposite is true for the car.
If you are in need of doing that to purchase a car, well, perhaps you should re-evuate your priorities.
Perhaps purchasing a more affordable Corvette will do the trick until you can get what you really want.
If you are in need of doing that to purchase a car, well, perhaps you should re-evuate your priorities.
Perhaps purchasing a more affordable Corvette will do the trick until you can get what you really want.
10-21-2007, 10:23 AM
#49
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Hey I am a private banker in Florida so I deal with this ? all the time I tell my clients are you crazy. Do you know your house is on the line which is a discloser you must read. It states that you are using home to purchase sometHing. Look at this, if for some reason you can pay the equity line the bank can and will foreclose. Also prime right now is 7.75 with good credit you could get a better rate from a credit union in the 6ish range. My 2 cents use youR home'S equity for something diffrent, new pool, kitchen uPgrades not a car.
JOSH
JOSH
10-21-2007, 10:54 AM
#50
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St. Jude Donor '06
Two years ago I found I CANNOT deduct any home equity interest (per my tax advisor) because I make too much money(?????)
Somewhere round $175,000 annual income I (we) loose any home interest deductions.
I had sold a LOT of rental property that year (Paid about $350,000 Income Tax!!) so I guess I’m subsidizing everyone’s tax deductions…
Last two years I have had ZERO personal exemptions on my income tax forms and don’t expect any in the near future.
Sorry for the rant…
My 2 ¢
Somewhere round $175,000 annual income I (we) loose any home interest deductions.
I had sold a LOT of rental property that year (Paid about $350,000 Income Tax!!) so I guess I’m subsidizing everyone’s tax deductions…
Last two years I have had ZERO personal exemptions on my income tax forms and don’t expect any in the near future.
Sorry for the rant…
My 2 ¢
Your financial advisor has, most likely, already made the 2nd deduction on one of your other properties.
10-21-2007, 11:00 AM
#51
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St. Jude Donor '06
10-21-2007, 11:13 AM
#52
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St. Jude Donor '15
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So tell me about all this stopped Music. I was on the floor of the Chicago Mercantile Exchange on Monday Oct 19, 1987 so I know better than most what happened. http://www.lope.ca/markets/1987crash/
The market came roaring back, you lost if you SOLD, most didn't because WE weren't answering the phones, lol.
1998/2000 what about it? I know people who made fugging killing, bozos held on forever, greed set in.
Real Estate actually stopped in Nov 2005, that was peak. People get greedy, real estate flipppers, whackos in CA who think they can flip house every 3 months and make $150k. No pity party from me.
Most of the Real estate problems today are in 4 states, CA, FL, AZ, and NV. This is where most foreclosures are occuring at rapid pace. People buying homes with Zero down, no reserves in bank, lying about income, etc... I should know, I own a mortgage firm and deal with these bozos on a daily basis.
"Can you refinance my house in Temecula CA, I owe 700k and the house is worth 580k. Sure lady, my lenders love to lose money, they'll give you a loan of 700k to payoff house worth 580k"
The market came roaring back, you lost if you SOLD, most didn't because WE weren't answering the phones, lol.
1998/2000 what about it? I know people who made fugging killing, bozos held on forever, greed set in.
Real Estate actually stopped in Nov 2005, that was peak. People get greedy, real estate flipppers, whackos in CA who think they can flip house every 3 months and make $150k. No pity party from me.
Most of the Real estate problems today are in 4 states, CA, FL, AZ, and NV. This is where most foreclosures are occuring at rapid pace. People buying homes with Zero down, no reserves in bank, lying about income, etc... I should know, I own a mortgage firm and deal with these bozos on a daily basis.
"Can you refinance my house in Temecula CA, I owe 700k and the house is worth 580k. Sure lady, my lenders love to lose money, they'll give you a loan of 700k to payoff house worth 580k"
Last edited by AORoads; 10-21-2007 at 11:44 AM.
10-21-2007, 11:56 AM
#53
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I see that you Edited your post, but I'll respond anyways.
Yes, the Michigan housing and economy SUCK bigtime. That is what happens when your Governor is a Female Liberal from Canada, Jenny Granholm. She caters to all the black/hispanic and UAW vote in Detroit. The West side where I live on the lake, closer to Chicago is almost all conservative. My precinct voted 93% Republican last election.
The Democrats continue to Raise taxes on the businesses here and drive business owners away. Liberals are whacky people.
I do NO mortgage financing in MI, period. Wouldn't waste my time.
Equity has been stripped or depleted thru lower market values, bank foreclosures, etc... There are so many beautiful homes in foreclosure right here on Lake Michigan it is unbelievable. Many huge good paying companies like Pfizer have left and ain't coming back.
I only do business out of state, I'm in 40 states so anywhere except MI and Ohio is fine with me.
Money is still awesome.
Yes, the Michigan housing and economy SUCK bigtime. That is what happens when your Governor is a Female Liberal from Canada, Jenny Granholm. She caters to all the black/hispanic and UAW vote in Detroit. The West side where I live on the lake, closer to Chicago is almost all conservative. My precinct voted 93% Republican last election.
The Democrats continue to Raise taxes on the businesses here and drive business owners away. Liberals are whacky people.
I do NO mortgage financing in MI, period. Wouldn't waste my time.
Equity has been stripped or depleted thru lower market values, bank foreclosures, etc... There are so many beautiful homes in foreclosure right here on Lake Michigan it is unbelievable. Many huge good paying companies like Pfizer have left and ain't coming back.
I only do business out of state, I'm in 40 states so anywhere except MI and Ohio is fine with me.
Money is still awesome.
10-21-2007, 11:59 AM
#54
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Hey I am a private banker in Florida so I deal with this ? all the time I tell my clients are you crazy. Do you know your house is on the line which is a discloser you must read. It states that you are using home to purchase sometHing. Look at this, if for some reason you can pay the equity line the bank can and will foreclose. Also prime right now is 7.75 with good credit you could get a better rate from a credit union in the 6ish range. My 2 cents use youR home'S equity for something diffrent, new pool, kitchen uPgrades not a car.
JOSH
JOSH
Your advice was decent until you told him to invest in a Pool
Home prices in the Midwest actually go down when you add a pool. Many times the Realtor will tell the Seller to fill in the pool with dirt and put sod down. 90% of buyers hate pools.
10-21-2007, 12:21 PM
#55
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I have to strongly agree with JFTaylor in regards to using a HEQ Line to pay for something like this or simpy consolidate CC bills etc. I have been doing that for several years now and it is recommended by my financial advisor as well as people I know who work at large accounting firms.
The interest all deductible and the rates right now are actually pretty good. You can often close out your current HEQ line and open a larger one if you have enough equity in your home.
I typically use my HEQ Line for making part of the payment not necessarily all of it. I used this strategy for my boat and will use it for the corvette when I order this spring. I would much rather have a large HEQ line and zero credit card balances and a smaller car payment with interest that is deductible than paying tons of interest that is not.
Ohh you also can setup your HEQ Line so that you are paying interest only each month and it keeps the payments very low. Just pay extra everymonth as you can to get the principle down but it gives you flexibility in case of any hardships or periods of low cash flow.
- Mitch
The interest all deductible and the rates right now are actually pretty good. You can often close out your current HEQ line and open a larger one if you have enough equity in your home.
I typically use my HEQ Line for making part of the payment not necessarily all of it. I used this strategy for my boat and will use it for the corvette when I order this spring. I would much rather have a large HEQ line and zero credit card balances and a smaller car payment with interest that is deductible than paying tons of interest that is not.
Ohh you also can setup your HEQ Line so that you are paying interest only each month and it keeps the payments very low. Just pay extra everymonth as you can to get the principle down but it gives you flexibility in case of any hardships or periods of low cash flow.
- Mitch
10-21-2007, 12:27 PM
#56
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I forgot to note, every situation is different as well. I wouldn't even do this or make a large car/boat or whatever purchase if I didn't already have 2 steady incomes and a nice chunk of my primary home mortgage paid down.
10-21-2007, 12:43 PM
#57
Melting Slicks
10-21-2007, 01:34 PM
#58
Le Mans Master
Let's say this month I have a health insurance bill due (true) and it is over $7K (also true). I could raise the cash to pay the credit card bill (I charge the insurance to get the 1% back from the credit card company) but that would mean a sudden sale of assets rather than time averaging. So I pay the $200 interest this month (not true because I'm almost even on debt this month) and turn around and borrow $7500 from the same loan account to pay the credit card. Next month (or next week) I pay back $3500 and another $4K before Christmas.
You can use a HELOC to levelize your cash flow. Yes, it's nuts to only pay interest if you have the money sitting there doing nothing but my money is always doing something. Sometimes it's available and sometimes it isn't. A HELOC gives you the freedom to not care as well as saving money.
You can use a HELOC to levelize your cash flow. Yes, it's nuts to only pay interest if you have the money sitting there doing nothing but my money is always doing something. Sometimes it's available and sometimes it isn't. A HELOC gives you the freedom to not care as well as saving money.
10-21-2007, 01:41 PM
#59
2005 Beast
People really amaze me. Talking about losing thier house from a financial disaster and crap. Lol, I'll tell you if your buying a corvette and looking at how to finance it and have the ability to use your line of credit, yes you can deduct the interest on your taxes makining almost a free loan, also you should only do a line of credit if you can cover your equity with other investments in case of a financial disaster. Line of credit is the most powerful financial option because it gives you, the buyer full power against any dealership crap offers they make (did you know if you finance with the dealer they can raise the interest % by whatever they want and its totally legal) having the cash in hand before you negotiate is very powerful.
Best thing you can do provided you can cover your line with another investment in case of financial disaster. If you cutting it that close you shouldn't be buying vette anyway.
Best thing you can do provided you can cover your line with another investment in case of financial disaster. If you cutting it that close you shouldn't be buying vette anyway.
10-21-2007, 01:56 PM
#60
Team Owner
I have to strongly agree with JFTaylor in regards to using a HEQ Line to pay for something like this or simpy consolidate CC bills etc. I have been doing that for several years now and it is recommended by my financial advisor as well as people I know who work at large accounting firms.
The interest all deductible and the rates right now are actually pretty good. You can often close out your current HEQ line and open a larger one if you have enough equity in your home.
I typically use my HEQ Line for making part of the payment not necessarily all of it. I used this strategy for my boat and will use it for the corvette when I order this spring. I would much rather have a large HEQ line and zero credit card balances and a smaller car payment with interest that is deductible than paying tons of interest that is not.
Ohh you also can setup your HEQ Line so that you are paying interest only each month and it keeps the payments very low. Just pay extra everymonth as you can to get the principle down but it gives you flexibility in case of any hardships or periods of low cash flow.
- Mitch
The interest all deductible and the rates right now are actually pretty good. You can often close out your current HEQ line and open a larger one if you have enough equity in your home.
I typically use my HEQ Line for making part of the payment not necessarily all of it. I used this strategy for my boat and will use it for the corvette when I order this spring. I would much rather have a large HEQ line and zero credit card balances and a smaller car payment with interest that is deductible than paying tons of interest that is not.
Ohh you also can setup your HEQ Line so that you are paying interest only each month and it keeps the payments very low. Just pay extra everymonth as you can to get the principle down but it gives you flexibility in case of any hardships or periods of low cash flow.
- Mitch