Is it wise to consolidate a mortgage of 100,000 which is now a 30 yr. together with a car 400.00 on a 12 year

Question

I have a mortgage 100.000 with a payment of 750.00 and a car payment of 400.00 with a bal of 23,000 the car is a 5 year and the house is a 30 year I would like to consolidate both payments to a 12 year with payments of 1.200 a month, and I could send 1.300 a month. Is this wise move to make?
Thanks,
nme

Answer 1

I don't think its wise to stretch out your payments on a car that long....by the time its 12 years old, it will probably be in the junkyard

Answer 2

If you are financially sound and have a good debt ratio already (monhly expenses divided by monthly income) Then no don't do it. But if you are doing to move to increase cash flow or need that extra tax benefit of a real estate loan then maybe. It all depends on what the strategy is, what are you trying to achieve? If you want to get your debt paid off quickly then I suggest putting the extra 150 towards the vehicle until it is paid off. I got this figure by adding what you are currently paying together 750+400=1150 and then subtracting that from what you are willing to pay if they were combined 1300-1150=150. Then when the vehicle is paid off you can apply that money towards the mortgage. That way you have a short term goal and a long term goal.

Answer 3

Do not consolidate this debt. Start applying the extra $150 towards principal of loan with higher interest rate. That way you will be able to payoff the loans in shorter time. After you pay off your car loan start making $1300 payments towards the other loan. That way you will payoff your mortgage in shorter time and will save money on interest.

Answer 4

No, that's an awful move!

By doing what you suggest, you will be paying for your car 12 years. (may be somewhat shorter because you will be paying into principal with extra payment)

Extending your payment for a purchase beyond its usuful life is not a good idea.