answersLogoWhite

0

  • Car Buying
  • Personal Finance
  • Loans
  • Home Equity and Refinancing
  • Home Buying
  • Money Management

Is it wise to get a home equity loan to buy a new car?

User Avatar

Wiki User

βˆ™ 2015-09-03 13:42:03

Best Answer
Copy

Answer

No. Home equity loans are revolving credit lines. In simple terms, that means you could pay on that for three years and not even touch the principal. I wouldn't do it. Maybe rolling it into a consolidation loan if you have enough equity in your home, but not a HELOC.

Answer

No. You want to avoid "institutionalizing" your debt. In other words, you don't want to spend 15 years on an equity loan paying for a car that you might only have 5-6 years. It really depends on your personal situation. If you have lots of equity in a house, and the monthly payments aren't too much, and you expect that the house will continue to appreciate etc. then MAYBE. But what if interest rates rise (equity loans are usually directly tied to the fed rate), or the housing bubble bursts - then you are stuck with those payments forever. Upside is that the equity loan is tax deductible, car loan is not. Do the math!

2015-09-03 13:42:03
This answer is:
πŸ€“
🀯
πŸ€”
User Avatar

Your Answer

Loading...

Related Questions

Can you buy a new home with home equity loan?

Yes, if you have enough equity in one home and want to use it to buy another. Otherwise, no. You cannot use a home equity loan to purchase a home since you have no equity that has accrued.


Is a home equity loan considered a refinance?

No. It is home equity line of credit that is secured by your home. You use it to buy things and if you buy too much and can't make the payments the bank can foreclose and take your home.


Is the loan you take to buy the business considered a liability and equity?

The loan is considered a liability - The value of the company is the equity.


Why would you want to get a home equity loan?

Most people can not pay the full amount of a home right when they buy it. One must acquire a loan that they can pay off a little each month. Otherwise, they couldn't buy a house.


What type of cred it is if a bank loans you money to buy a new car?

Normally it is called an Auto Loan if you are using the vehicle as collateral for the loan. But, you can use something else as collateral such as your home, in which case it would be a Home Equity loan.


Can you get a home equity line of credit to buy a home?

No. You must apply for a purchase money mortgage if you do not already own any home. If you already own a property and have enough equity in that property, you can take a home equity loan on that property and use those proceeds to purchase another property.No. You must apply for a purchase money mortgage if you do not already own any home. If you already own a property and have enough equity in that property, you can take a home equity loan on that property and use those proceeds to purchase another property.No. You must apply for a purchase money mortgage if you do not already own any home. If you already own a property and have enough equity in that property, you can take a home equity loan on that property and use those proceeds to purchase another property.No. You must apply for a purchase money mortgage if you do not already own any home. If you already own a property and have enough equity in that property, you can take a home equity loan on that property and use those proceeds to purchase another property.


Can parents gift 150000 or 50 percent of cost of home to children to buy a home?

This will depend on the loan program. In the case of FHA you can still receive the gift of equity from a relative.


You are trying to get a home equity loan but do not have home owners insurance now is it too late to try and get insurance on your home?

Very close. They may buy it for your at a healthy cost above what you may obtain a policy.


If your home is in forcloseure can you qualify for a reverse mortgage?

No you typically do not unless you have significant equity in your home. Reverse mortgages are typically where you draw down the equity in your home. I am assuming that if your home is in foreclosure that you would have exhausted the equity or the lender would have considered rewriting your loan. There are several resources that can provide you with additional information, I have included them in links for you. If you are stuck, you might want to consider the alternative and try to buy your home back when they do the auction.


What is a loan when you buy a property?

The loan to buy a property is known as a mortgage.


How can you remove your spouse from a home title in a divorce?

As part of the divorce decree, you'll should be able to buy out your spouse's equity in the house and assume loan ownership. Divorces are a give and take. Be prepared to give something (besides the cash equity) to get the spouse to agree.


Can you buy a home if you owe back child support?

If there is a child support lien against you it must be paid before the bank will loan you money to buy a home.If there is a child support lien against you it must be paid before the bank will loan you money to buy a home.If there is a child support lien against you it must be paid before the bank will loan you money to buy a home.If there is a child support lien against you it must be paid before the bank will loan you money to buy a home.


What is an insured home loan?

You can buy special life insurance which pays off your home mortgage if you die.Maybe that is what you meant by "insured home loan".


How do you turn a loan into what is considered cash for a foreclosed purchase?

This is a very broad question. Here are a couple of general answers. First you can refinance the home after it has been purchased for a "refi-cash out" loan. Equity in the home can be given to you up front and you just finance the upfront money it into your home loan. This is also done as a second and third lien on your mortgage. There are many loan guidelines for this to happen. You will need lots of equity in the house, along with good credit. Another way is to buy the home, fix it up and sell for a profit. Could be adding more square foot as well. Pretty general. Just be careful of any prepayments you have on the lien.


Is using your equity in a home to buy property subject to fraudulent transfer claims?

I don't know why it would be. The equity is a valid asset.


What is the purpose of an FHA loan?

Purposes of obtaining FHA loansUse an FHA loan to buy a homeFinancial assistance for senior individualsEnables you to buy a home, renovate it and incorporate all the costs into the loanTo make your home energy efficient


Should you wait to sell your home or pay off home equity loan Before and buy a new one with loan?

I'm not sure your question makes sense. If you sell your home, your home equity loan has to be paid off. If the sale of your house doesn't fulfill your debt, you are "underwater" and in a serious financial crisis - you shouldn't be thinking about getting a new home! Otherwise the sale of your house should leave you with some money at the least, and this should be enough for a decent down payment on a new home. Under no circumstances should you be getting a mortage on two houses at once, unless you are extremely secure in your financial situation (which, in these times, is rather unlikely).


How do I get a 10 million dollar loan to buy a luxury resort?

Use equity in existing invesments, prove, on paper, that you can service the loan - dont use over the top occupancy rates etc


Will applying for ebt affect me when applying for home loan in Florida?

Well, if you can't afford to buy food, how are you going to afford to pay for a home loan?


Can servicemen get government loans to help buy their first home?

I'm not an expert but I know that the government help servicemen get a loan or give them a loan if they want to buy a house. It is called a military loan.


Where can one buy a home loan with bad credit?

There are many places to get a home loan for people with a bad credit. Some of these places include Home Loan Specialist, ICC Mortgage and Financial Services, E-Loan, MortgageCreditProblems and Ameriquest Mortgage Co.


Can you buy a home owned by Freddie Mac with a Fannie Mae loan?

No


How do you gain ownership of a mobile home on my property?

To get mobile home loan you have to satisfy certain standards set up by the 1976 HUD code.For mobile home financing you can take mortgage loan to buy both the land and the mobile home or to buy either the home or the land.


Do owners equity and capital mean the same thing?

No. Capital is what the owner invested in the property originally, where as equity is the difference between the buying price & the selling price. EG. buy a home for $50K (using your own CAPITAL) sell the home for $200K = $150K Equity.


What is a non purchase money loan?

A purchase money loan is a loan usually used to buy a home. A non purchase money loan is a loan for other reasons where the lender does not know what is being bought.