Should I finance a car by using the equity in my house?

Answer 1

It is a good idea if you do have the equity, as you can write off the interest instead of getting a car loan and letting the interest paid go to no use.

Answer 2

There are a few things to consider. If your credit score is good, many new cars can be financed for little or no down, and often with 0% interest through the manufacturer, like gmac for G.M cars. That's better than 5-7% or more on any amount you would repay on most equity lines.
If, however your score isn't quite up to that, and the interest is less to borrow on an equity line than what a dealer offers, the equity line may be a better way to go, if the term of the loan is the same.
Remember, 5% on 25,000 for 15 years is much more expensive than 8% for 4 years...most banks have customer service reps who can give you the cold hard numbers on what you'll pay, short or long term...

Answer 3

If you have enough equity go for it, as long as the interest rate on your home loan/equity loan is good. If you can get a better rate on the car it may be a better deal, but you have to factor in the amount of interest you will be paying since you could write it off if you do the equity loan.

Answer 4

depends... in some cases you will be able to write it off, check with an accountant, but you will be using up your equity which you may need later on for something more important... lastly, based on my own experience, you could think two years from now, well we don't owe anything on it, why not trade it in and get a new one.... but of course you still have it packed into your home loan