am looking at a home equity, need a new car,should i get money for it in my loan?

Answer 1

Nope ,
If you get behind on the car ,
They come take your house .

Several 0% loans by auto makers out there ,
Go for that .

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Answer 2

Depends on your tax bracket and interest rates on your Home Equity Loan and possible auto loan. For example, if your home loan is 7.75% (3/4 points under prime) and your auto loan is 7% and your tax bracket is 25%.

7.75% * 25% (possible tax savings) = 1.94
7.75 - 1.92 = 5.83

Your home loan approximate cost to you after tax savings is 5.83%, thus a better deal than an auto loan at 7%. If you can get an auto loan for 5.75%, then it would be a better deal to take the auto loan.

The other item that comes into play is if the loan is variable rate or not. If your Auto is fixed at 6%, and your home loan is variable at 7.75%, then you have to determine if you believe rates are going to increase or decrease (looks like they're about to go down). In this case you might choose the Home loan because it may save you money for a while, although, over the long haul rates may increase leaving you exposed to an increased cost. My recomendation would be to put the math on paper and if the Auto loan is not substantially more on the rate side, if you can get the fixed rate, go with the auto. Also, get a Home Equity Credit Line and leave some extra room on the line of credit. If rates change you can use the remaining credit line to pay the car off, or not.

Also, look at 0% auto loans to see if you get the rebates. Often paying a bank interest is actually cheaper than a 0% loan. When the finance company keeps the reates it's just like prepaid interest and can (and often does) cost you more.

Answer 3

The answer for this is different for everyone. It is a personal decision based on a lot of different things.

If you are disciplined and in good financial shape, the home equity loan is tax deductible which depending on your tax bracket provides a variety of different rates of return.

However, if you are not in good financial shape, an auto loan has less liability as they can repo just your car in the event of default.

Generally a home equity loan is a termed loan with much longer terms 10,15, 20 so your payment will be substantially lower. However, another option is a Home equity Line of Credit which is usually a 10 year, but you can pay it off and re-use it.

A lower payment is good for your cashflow, but you will end up paying more total dollars in the long run, and when your car is fully "used up" you will still be paying off the loan.

Answer 4

If you are a first time borrower of a home equity loan it is imperative that you have a checklist of essential questions that you need to ask each and every lender. The answers to these questions will provide a valuable reference to base your comparisons on. What’s the interest rate? Knowing this is crucial. The interest rate will determinepercentage by which the adjustable rate will change. What is the Annual Percentage Rate or APR? The APR on the home equity loan will determine the yearly payment you will need to make towards this.The higher the payment in terms of points, the lower is the interest rate.

Answer 5

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