UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next
Author: 2old4bs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Re: Real-Estate Leveraging Date: 9/1/2005 11:35 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
If you plan on having $43000 in the bank within 2 years, why couldn't you first use a portion of that to pay off the car loan, then use the extra savings that puts in your pocket to pay off the other loan?
The reason is because if I refinance and have a small payment, this will enable me to save the $43000 a lot easier within 2 years. If you notice above, I will cut my payments in half. That's why they call it leveraging.

You are currently paying $833/mo on your loans. You're estimating the mortgage payment would be $253/mo. That's a difference of $580/mo multiplied by 24 months = $13,920. So if you intend on saving $43,000, you must contemplate saving an additional $29,000 from other sources during the 2 years, which is over $1200/mo.

Your car loan is $15,500. All I'm saying is to apply that $1200/mo first to the car loan. You should have that paid off within 1 year. That will reduce your monthly payments from $833 to $542. You can then use both the $491 regular payment on your car loan, plus the $1200 'other' savings money to pay down the personal loan, a total of ~$1700/month. That should pay off the remaining balance on the installment loan pretty quickly! (less than 2 years maybe?)

Also the installment loan is secured with my home property with a 5.8% interest. The car loan is around 5% as well.

As of this week, a 30 year fixed mortgage is 5.26%, so there is very little difference in interest rates among the various loans, and on a mortgage you would have to absorb closing costs and fees.

You might be trying to find a way to justify a decision you're already determined to make, but IMHO, the reasons you have given are just not good enough to gamble away your home.

Read the post below and you will see that I know of what I speak:


Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next


The Retire Early Home Page
Discussion on accelerating retirement day.
2013 Feste Award Voting Begins!
Who will win the 2013 Feste Award? Vote now for the Fool that most exemplifies the Fool Community mission of Learning Together!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Tax Strategies

TMFPMarti-Feeling Good
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.