*Look away Dave Ramsey enthusiasts* -- Buying Bronco with cash out home refinance?

[6GSooner]

Anyone looked into doing this? Probably not the most financially savvy thing ever... but with how low rates are and how much home prices have gone up I’m kinda considering it tbh. I could basically have my mortgage go up $25 a month and pull out $40k or so with how rates are currently. And at 3.5%ish interest that’s going to be better than any deal on financing the Bronco most likely. Of course I would do this and pay a lot extra on the mortgage to pay it down early. Would just be nice to have lower monthly obligations.

You'd pay $20,000 of interest on the mortgage... about $4000 on an auto loan if you went the worst case 72 months at the same interest rate.

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[Smuck]

I mean debt is debt. I’m going to refinance anyways (I have PMI and 4.625% interest rate currently) if I can get rid of both of those things, as well as pull cash out it would be nice to have the Bronco paid in full and have the title in hand. If I ever needed to I can sell it instantly. I like that.

Look at the difference in interest though. For me I switched to a 15 year and saved a but load of interest money I was throwing away.

 

[LarryZiegler]

Just wanted to point out this thread died last September 2020.

Otherwise, yeah, don't use home equity for cars.

Good point on the posting date as I missed it as well, but more pertinent today as new Broncos are rolling in and financing has to be planned for......and seeing these nutso commercials from lenders trying to entice borrowers to use cash out financing to get money out of their house.

 

[Nickp]

You'd pay $20,000 of interest on the mortgage... about $4000 on an auto loan if you went the worst case 72 months at the same interest rate.

Look at the difference in interest though. For me I switched to a 15 year and saved a but load of interest money I was throwing away.

Good point on the posting date as I missed it as well, but more pertinent today as new Broncos are rolling in and financing has to be planned for......and seeing these nutso commercials from lenders trying to entice borrowers to use cash out financing to get money out of their house.

How much things have changed lol. Actually just got licensed as a mortgage loan officer and honestly if I had the equity I probably would still follow through with this plan but I’m just a little shy LTV wise. But I value cash flow over everything, finances are really an opinion there is no “right answer”.

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