About to purchase- Finance questions
Hey all, I have a downpayment on a new travel trailer and just sold my pop up last night. Thursday I will go to sign papers. They were touting 4.99% finance rates until I got the deal. Then it ju...
Forum Discussion
I'm one of the pay cash or close to it crowd. My personal tolerance is a mortgage and one car loan at a time that is financing 50% of the purchase price and paying off in 18 months or less.
You are putting a big chunk down and have a reserve so I understand the financing. Here's what I'll toss out at you, at early 30's you don't remember what regular interest rates are. We are in an extended period of low rates which is partially why I'm fine with loans on one vehicle. By my math, the difference in 12k at 5% for 10 years and 6% for 10 years is $6/month: $136 vs $142. If you take the full ten years which is not recomended and you said you intend to pay early, that is $720 total difference.
The fact that you only have a few payments left on your truck is valid to your analysis but irrelevant to the credit agency that is figuring your credit score. When it's paid off, you will probably get a bump up. I say if you don't have a credit union, just take the 5.99, pay it off over 5 years or less, and move on. That's not a bad rate on a TT.
You are putting a big chunk down and have a reserve so I understand the financing. Here's what I'll toss out at you, at early 30's you don't remember what regular interest rates are. We are in an extended period of low rates which is partially why I'm fine with loans on one vehicle. By my math, the difference in 12k at 5% for 10 years and 6% for 10 years is $6/month: $136 vs $142. If you take the full ten years which is not recomended and you said you intend to pay early, that is $720 total difference.
The fact that you only have a few payments left on your truck is valid to your analysis but irrelevant to the credit agency that is figuring your credit score. When it's paid off, you will probably get a bump up. I say if you don't have a credit union, just take the 5.99, pay it off over 5 years or less, and move on. That's not a bad rate on a TT.
