To Borrow or use savings

Z

z101

Guest
I am saving to get married shortly and eventually build a house. I have 50k saved which includes my SSAI. I have just bought a car for 15k and was thinking of borrowing about 8k of that so as not to go into my savings too much, due to above and rainy day syndrome etc. I am self employed so I have a 15k tax bill coming up shortly also. Tesco's rates are holding at 6.9% so I would hate to borrow at higher rate in a couple of years(I view rates to go up).
Is this borrowing sensible or not?
 
Surely you don't need €50K for a rainy day fund? Borrowing for a car seems crazy when you could pay cash.
 
Like I said, I am saving to get married and to build a house - with a small thought for the rainy day.
 
I'd imagine that if it was a case of going for a self build mortgage with €50K in the bank and an €8K unsecured loan or with €42K in the bank and otherwise debt free then most lenders will look more favourably on the latter situation and you would be saving yourself money to boot.
 
Is that a fact Clubman? Is there any way I could confirm this?
 
Not a fact which is why I said "I'd imagine ...". Maybe some of the broker types who post here could comment. However I would imagine that lenders would be happier to see borrowers with no other debts even if it means a lower savings account balance.
 
First question mortage lenders ask is about existing loans.
Use the cash for the car, otherwise you're only fooling youself that you have the 50k.
 

If you buy the car and pay your tax bill, really then what you do have is 20K towards your house and marraige.

Would you not be better off buying a cheaper car?
 
I drive quiet a bit so I need a certain level quality of car. That aside I just sold my old car for 3K and my tax bill is not coming from savings. I have separate money in business account for that. My savings is net income I have put aside for purpose explained - thus the nature of the question as I would be going into it for other reasons.
 
Apolagies, I can see why you thought tax bill comes from saving reading initial post. Also car is already bought
 
You must log in or register to reply here.
Menu
Log in
Register