Putting car loan into mortgage

Jack91 · 04-10-2019, 07:21 PM

Whats involved in this and should i shop around? Currently with aussie but since my local branch has been sold its impossible to get an appointment and the owner seems like a gronk.
Currently sitting at 150k debt, car loan at about 33. Value of house is 250ish. It looks bad though with renos going on. Was told to finish house first then refinance but want to clear other debts to fast track renos. I want to sell the car but wont get enough to clear the loan or itll be too close for my comfort
Advice?

Jack91 · 04-10-2019, 07:25 PM

Should also say i hate people and paperwork and have burned bridges at the only other big broker in town. I also have no patience or time during business hours. Also the loan is actually through aussie who i think is funded by cba yet somehow got a better rate

simon varley · 04-10-2019, 09:08 PM

do you really want to be paying for that car in 30 years time?

pauljh74 · 05-10-2019, 04:02 PM

Quote:

Originally Posted by simon varley

do you really want to be paying for that car in 30 years time?

If your interest rate for the car loan is higher than the mortgage, as long as you put all the money that would have gone to the car loan into the mortgage, you'll come out ahead. Where it costs you more is when you're paying $X for the home loan and $Y for the car loan and you pay less than $X + $Y when you combine the 2 loans.

yearby · 04-10-2019, 09:17 PM

I have put a car loan onto a house loan before, the advantage is you pay a lower rate for a house loan than a car loan.

simon varley · 04-10-2019, 09:20 PM

for a much longer period.

Nu66et · 04-10-2019, 09:23 PM

Quote:

Originally Posted by simon varley

for a much longer period.

I guess you would have to pay back the original sum of the car loan over the same time period to see the benefit of the lower interest

b0son · 04-10-2019, 10:18 PM

Redraw 33k from your house loan and pay off the car. Amounts to the same thing.

Pis-ton broke · 05-10-2019, 07:39 AM

personally i would sell the car and put the money towards paying the mortgage. i would drive a very cheap but reliable car.

**FairmontGS** · 05-10-2019, 07:51 AM

Quote:

Originally Posted by Pis-ton broke

personally i would sell the car and put the money towards paying the mortgage. i would drive a very cheap but reliable car.

^^^ This. Paying off a $33k loan on something that will continue to depreciate towards $0 versus putting that money back into the house which appreciates over time. No brainer.

Go and spend $2k cash on a good BA sedan.

Jack91 · 05-10-2019, 08:08 AM

Quote:

Originally Posted by FairmontGS

^^^ This. Paying off a $33k loan on something that will continue to depreciate towards $0 versus putting that money back into the house which appreciates over time. No brainer.

Go and spend $2k cash on a good BA sedan.

Thats the plan. But i cant just up and sell the car under finance incase i dont get enough for it

vztrt · 05-10-2019, 10:10 AM

Essentially you would need to refinance the property. Make sure the time of the loan doesn't get reset.

If your already making payments on the car then you need to make sure you feed these payments into your loan or you will end up paying more than staying with what you finance company.

If you have a redraw facility on your home loan could you take that money out (if your have some money to take out) for the difference of the finance if you want to sell the car and are still left owing?

Essentially at the end of the day you just need to make sure you pay the debt off in the right time. You shouldn't use your home loan if your not gonna pay the extra money. You would be better of at looking for a consolidated loan.

Sprintey · 05-10-2019, 05:02 PM

Quote:

Originally Posted by Pis-ton broke

personally i would sell the car and put the money towards paying the mortgage. i would drive a very cheap but reliable car.

Jack, I'm watching a relative in exactly the same position at the moment.

Good comments from Simon (do you want to be paying it off in 30 years) & Fairmont GS & Boson & vztrt (you make it sound like a minefield vztrt! But you sound like you know your stuff)

My relative is almost at that lightbulb moment where he sells the 50K loan dual cab, and gets a good BA or VY or old Corolla or something similar to get to work. He was really good at getting the debt down for some years, but then life/house/crash saw the loans get larger. I do worry for him as he works really hard, would love to be able to just pay it out for him if I could. But yeah, choices we all make...

Personally, our paid out old Terry is 12 years old now, paid cash, it's probably about to go in the bogan stage, but it still works pretty well. Costs enough with 700 rego, 430 insurance but we're driving it less so it's a tank of fuel a month. Relatively cheap and AWD if we need it for the ski stuff.

Plus, if you choose a really good condition BA, you might just hold it long enough to see it go up in value, somewhat negating all the fuel and maintenance to get to work. But that might be a while, and depends on the run to work not being too long. You never know.

*BA's also had dedicated LPG, depending on where you are that can be considerably cheaper on fuel. I got 10.9L/100km with the old school gas setup in the BAII ute back when it was new on my old job out in the field, good savings.

vztrt · 05-10-2019, 07:08 PM

Quote:

Originally Posted by Sprintey

Good comments from Simon (do you want to be paying it off in 30 years) & Fairmont GS & Boson & vztrt (you make it sound like a minefield vztrt! But you sound like you know your stuff)

I don't think it's really a minefield it's more just take a step back and look at your options and what is best for you. If we take the situation at hand there shouldn't be a problem taking the money out of the house for a car if you treat it like a second loan and pay extra money. If you can't do this then don't. You'll end up paying lots of interest.

Don't waste your money when lenders want your business.

Perhaps if the OP can try the one of the comparison sites for better rates. Find a decent lender for refinance and they will come to the house.
But he will have to fill out the forms....which didn't bother me when I saved 2.5k a year when I switched.

Citroënbender · 05-10-2019, 08:47 PM

Depending on level of realistic ability to maintain a car, there is good value and a wide choice of durable used vehicles from $5K-$12K done and dusted (private sale prices).

There’s a lot implicit in the original post, I have concern the finances could start to go backward and gather speed quickly.

Peter B - CV8 · 05-10-2019, 05:10 PM

If your valuation comes in at $250k - then most lenders will loan up to $200k (ie 80% of it's value) - without Mortgage Insurance. Obviously you also need to show serviceability.
So you could refinance ($150k) + include your car loan ($33k) + total new loan of $183k.
If the valuation comes in lower than say $230k - which it very well might, due to the current work in progress on the property, your stuck. This is why someone (no doubt with a bit of loan/valuation knowledge) has suggested you should try & finish the house reno's first - so it looks nice & has the best chance of valuing up without any dramas.
You mentioned that you don't like people, paperwork & have already burnt your bridges with one Mortgage Broker already. You're going to have to change your attitude in the current lending climate where lenders are focused on living expenses & are making customers/Brokers jump through hoops to get a loan approval...
Check with your car finance mob about any early repayment penalties as you might be up for an extra couple of grand there as well.

Jack91 · 05-10-2019, 10:08 PM

Some good advice although i don't need help on deciding on another car. I already have a 2nd car and the financed car only gets used on long highway trips so basically lives in a locked shed so im not really needing it. I am extremely comfortable at the moment with bills and expenses, i just thought of moving it on after renewing the insurance last week.

jstanovic · 06-10-2019, 01:12 AM

My bank gave me a “loan”, extra on the house for my car, but in a separate account over a different term. Basically they gave me $20k at 3.7% over a 4 year term but still on the home loan. I was just going to pay cash but I have put that money elsewhere earning me more than I’m paying.

Campbchen · 30-11-2020, 05:03 AM

I haven't heard about such a possibility. However, I would also try to sell the car in order to get some money and cover a part of the loan. I always try to cover them as soon as possible, because it's a terrible feeling for me. I think that the best thing would be to consult a specialist. He can advise you what is best to do as he is a professional and can tackle all kinds of mortgage issues. I appealed to such services and I'm very pleased to it. It extremely eases your work, so let me know if you try it.