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

JesseS

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So this means your future is secure, your emergency fund is full, your retirement funding on track, your 529 funding on track and zero other bills?

Some of us understand priorities, and drove lesser cars to be in that position, now I will be paying cash for my Bronco.
Same here, kids grown and gone, house paid, M/H paid, I am lucky with a steady income so will also just pay cash. My son did use his home as an ATM and regretted it, turned out OK a few years down the road but when the crash of 2009 hit he was sure singing the blues.





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MJJ

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Doing a basic mortgage calculator I can pull out $40k and my payment would barely change due to my rate reduction and getting rid of $100 PMI.

I like some of his info but some of it is god awful. Like only doing a 15 year mortgage is terrible advice.
I would be careful to suggest that Dave Ramsey offers terrible advice. It is clearly the advice you don’t want to hear. We can rationalize most anything when the desire is strong enough.
 
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I would be careful to suggest that Dave Ramsey offers terrible advice. It is clearly the advice you don’t want to hear. We can rationalize most anything when the desire is strong enough.
I think Dave’s advice is great for getting out of debt if you have a nearly insurmountable amount. As far as building wealth and retirement planning I don’t agree with him. I got my condo with 5% down on a 30 year conventional and after 18 months I could sell it right now and pocket at least $75k. Possibly more. With how absolutely insane rent prices are IMO getting into the most affordable house you can as soon as you can is the best option.
 

SamR

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Emergency fund and retirement are on track, although I only put money in my 401k, not Roth IRA right now. That is one of the main advantages I’ve thought about with doing this vs a traditional auto loan is I could max out my Roth IRA instead of making a car payment. I’m a big investing guy so if I can get cheap debt and invest more because of it... definitely something I’d consider.
This tells me you're already rationalizing spending the money on other things (investing) rather than putting the extra money back into the mortgage as a "car payment". My advice is don't do it. Do the refinancing part and investing part but leave the bronco for later when you can pay cash. It's painful but worth it.

You may not like what I suggested but you did come here looking for opinions so you got mine. :)
 
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This tells me you're already rationalizing spending the money on other things (investing) rather than putting the extra money back into the mortgage as a "car payment". My advice is don't do it. Do the refinancing part and investing part but leave the bronco for later when you can pay cash. It's painful but worth it.

You may not like what I suggested but you did come here looking for opinions so you got mine. :)
If everyone told me to do it without questioning me that wouldn’t be any fun now would it? 😂If I’m being 110% honest and do the best financial move, I would sell my Jeep and buy a Prius lol. As the kids say, YOLO and life without a Bronco isn’t a life worth living to me. I’m not a super materialistic guy except my vehicles and my guns. I’d rather sacrifice elsewhere and splurge on those two things.
 

ATLBronco75

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So I work in the mortgage industry but I don’t actually sell mortgages so this isn’t motivated from any sort of greed. But there is a situation where this isn’t a terrible idea. If you have not yet refinance your home in about the last six months since rates have been completely insane you could potentially refinance get the cash out for the Bronco and still end up paying less. If you’ve already refinanced and have a good rate this is a terrible idea.
 
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I did something similar - but different.

I don't owe enough on my home to get a refi deal, but taking out $X in equity increased what I owe just enough to get a lender to do the deal. I also pulled in the maturity date. With the current rates and the shorter mortgage, I got a much lower rate than the one I had. They also included the closing costs. The end result? No out of pocket, a lower monthly mortgage payment, and cash in my pocket. Plus I'll have the house paid off a few years earlier. The money I got on the frontend plus the money I'll save on the backend will pay for the Bronco.

If you really want to pay off your mortgage faster, sign up with a service that takes half a month's mortgage out of your checking account every two weeks. That's what I do. You end up making an extra payment every year and you don't even notice it.
I already kind of do this, I get paid biweekly and cover my monthly bills with just 2 paychecks. So every year I have 2 checks that end up unused in my bill account. Been using that to pay down other debt but would use it towards mortgage principal in this circumstance.
 
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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.

Purchasing a car through a refinance of a home is just adding debt with no possible increase in value. Why would you want to add 40+ K to your 'home' loan? Might want to pass on the Bronco if you have to do that to purchase it.
 
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Purchasing a car through a refinance of a home is just adding debt with no possible increase in value. Why would you want to add 40+ K to your 'home' loan? Might want to pass on the Bronco if you have to do that to purchase it.
I don’t have to, I can easily afford the payment. Just trying to figure out what the cheapest way to do it is.
 

bbqbronco

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If everyone told me to do it without questioning me that wouldn’t be any fun now would it? 😂If I’m being 110% honest and do the best financial move, I would sell my Jeep and buy a Prius lol. As the kids say, YOLO and life without a Bronco isn’t a life worth living to me. I’m not a super materialistic guy except my vehicles and my guns. I’d rather sacrifice elsewhere and splurge on those two things.
What happened to your wrangler?
 

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I don’t recommend using your house as an ATM for a car purchase. Competitive car interest rates are closer to 2.5%. I just re-fied my house at a 30 yr fixed rate of 2.6% and would NEVER consider using the considerable equity to buy a car, pay off other debt, etc. in fact I did not finance any of the closings costs either....the payoff amount on the old mortgage was within a few hundred dollars of my re-fi amount. I value my home as a place to comfortably live without any threat of losing it like so many people did 12-13 years ago (not me). My suggestion is to keep large purchase financing separate. 😀
 

Lab00Rat

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Follow Dave. Sell everything that has a debt associated with it and buy the Bronco with (some) cash.

Debt Sucks - drop it like a bad habit because all you are doing is funding the banks so they can go buy all the 'Bronco's' they want. I refuse to support the king makers. No debt for me.
 

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