05-29-2008, 11:16 PM
You sure you want to put it on Home Equity? If you number that out, you'll be paying considerably more in interest, for a lot longer, than you would if you got a normal low-interest Auto Loan.
Consumer advocates tend to discourage people from rolling car loans into Home Equity (not that I've not done it before, but with conditions described below, and perhaps others here, too, use this method) it's something to consider.
The only way to offset the compound interest penalty you'd pay for including a car loan into Home Equity is to make additional payments on the principal, for example, the equivalent of a car payment, or at least a sizable additional voluntary monthly payment, paying directly toward the principal of your Home Loan. Then you come out even, or ahead.
Otherwise, an ordinary car loan is less expensive. Hiding it in your Home Equity loan will eventually be more costly. As our accountant told us, you'd be paying interest on the money you borrowed to buy the car for 20-30 years, instead of paying interest for only 5 or 6 years. Making direct voluntary payments on the principal (as many do, or many start out with the best intentions of doing) is the only way to get around that and have the interest advantage instead of disadvantage.
Consumer advocates tend to discourage people from rolling car loans into Home Equity (not that I've not done it before, but with conditions described below, and perhaps others here, too, use this method) it's something to consider.
The only way to offset the compound interest penalty you'd pay for including a car loan into Home Equity is to make additional payments on the principal, for example, the equivalent of a car payment, or at least a sizable additional voluntary monthly payment, paying directly toward the principal of your Home Loan. Then you come out even, or ahead.
Otherwise, an ordinary car loan is less expensive. Hiding it in your Home Equity loan will eventually be more costly. As our accountant told us, you'd be paying interest on the money you borrowed to buy the car for 20-30 years, instead of paying interest for only 5 or 6 years. Making direct voluntary payments on the principal (as many do, or many start out with the best intentions of doing) is the only way to get around that and have the interest advantage instead of disadvantage.