Q
1) If you cannot consolidate all your loans without extending the terms of those loans.
When does this make sense?
It would all be treated as a 20 year loan.So, you've 20 years remaining on the mortgage and you take out a 5 year car loan on top of it.
Nope, I'm not talking about spreading the repayments over the entire lifetime of the mortgage. I'm talking about being disciplined and increasing your mortgage repayments for the 3-5 years it would have taken to pay off a separate car loan. Obviously, for it to make financial sense you'll have had to have had a variable rate mortgage where repayments can be changed without penalty.Never!
The source of funds should match the expected lifetime of what you use the funds for. A car loan would typically be 3 or 5 years. If you drew 'mortgage funds' down to buy a car, you would be still paying interest on those borrowings long after that car had passed from your ownership.
Fire up a spreadsheet and work out the cost of ..
a) borrowing 10K over 3 years at 10%
b) borrowing the same amount over 15 years at 5%.
The figures work out for me as
a) 11616
b) 14234
It would all be treated as a 20 year loan.
Nope, I'm not talking about spreading the repayments over the entire lifetime of the mortgage. I'm talking about being disciplined and increasing your mortgage repayments for the 3-5 years it would have taken to pay off a separate car loan. Obviously, for it to make financial sense you'll have had to have had a variable rate mortgage where repayments can be changed without penalty.
So, if your quoted car loan repayments were going to be €500 p.m. for 3 years, instead borrow the money off your mortgage and increase your mortgage repayments by €500 for 3 years. It's what you'd have had to do anyway, and at the end you'll have your 'car loan' paid off and more.
Ah, so that's the only catch then!If you find a bank that offers you that level of flexibility, post their name here and we'll all beat a path to their door
If you find a bank that offers you that level of flexibility, post their name here and we'll all beat a path to their door
Why do you need a loan for a new girlfriend?
mf
Qomn0001Re: Borrowing when you have a mortgage?
Quote:
Originally Posted by mf1 http://www.askaboutmoney.com/showthread.php?p=703351#post703351
Why do you need a loan for a new girlfriend?
mf
She'll be wanting shoes and stuff.
She'll be wanting shoes and stuff.
If you find a bank that offers you that level of flexibility, post their name here and we'll all beat a path to their door
Funniest thing I've read on this site in years!
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