About to purchase- Finance questions

OutdoorPhotographer wrote:
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.

Money is cheap now. Borrow while you can :)

I am not caught up on monthly payment, I am more caught up on the end result, which is paying an extra $800 (over 6 years) on the life of the loan. Why spend it if you can get it cheaper.

The monthly payment I don't mind so much as I cut in a lot of places so I can afford a monthly. For instance, a lot of people pay $100+ month for cable tv and internet. I have an antenna and no internet at home. I cut my own hair to save another $25/4 weeks. I buy my food cheap and prepare my meals for a week in advance vs going out.

A lot of people say they only buy in cash, then have monthly expenditures like cable tv, phone, going out, etc. It's all relative in the end. I rather have an object on loan that will be mine after a period of time, vs blowing it on stuff like cable tv or things I can do myself like hair cuts :)