Without giving you specifics, what would be the benefit of borrowing $50k instead of 30k assuming a lesser interest rate for more money borrowed?
2007-07-31 08:44:11 · 5 answers · asked by lucy 1 in Business & Finance ➔ Personal Finance
Don't borrow the money you don't need. Even the interest is lower, your principle is higher. And you have to pay the loan back, you increase your monthly payment. Are you doing any improvement for your house? Think about the reason to get the equity out of your house. If your house had been appraised higher than you bought it, then you can do something like that. If you don't have much equity in the house, then don't get another loan, because with the housing market like now. The price is still dropping slowly.
The extra money shouldn't put in the bank, but you can consider some mutal funds, at least the return will be a little bit higher.
2007-07-31 09:17:08 · answer #1 · answered by paobay 4 · 0⤊ 0⤋
None whatsoever, since you will be paying MORE interest on the much larger principal, even though the rate is lower. The only way this would make sense is if you could invest that difference of $20,000 at a better rate than you are paying to the bank.
2007-07-31 17:05:43 · answer #2 · answered by acermill 7 · 0⤊ 0⤋
Even if the interest RATE is lower, the interest AMOUNT will be more. So do not borrow any more than you comfortably need.
2007-07-31 17:27:35 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Probably not. If you are going to take the additional $20K that you don't need and put it into savings that will make more than the interest you'll be paying, then it would make sense - but that probably isn't going to happen.
2007-07-31 16:01:53 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
The thing you must ask yourself is, can you pay this loan back
Just one more payment
2007-07-31 16:02:23 · answer #5 · answered by ? 3 · 0⤊ 0⤋