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To God be the glory! My wifey and I have been shouting all weekend! Just signed the docs during lunch! The check is in the mail! We took advantage of Fort Campbell Credit Union's 2% Auto Refi promo. Although it's only 2%, you get 90 days no payments. We financed a brand new car last year with Santander for 25k @15%. Yeah, I know that was one of the dumbest things I've ever done! Now I'm @13% for about the same amount. My EQ is 583 and DW is 572. Plus we are 5k upside down. I just wanted to get from under Santander. And with these numbers I didn't think they would take the loan. We're going to take the next 6 months to get at least 680 and try DCU for under 5%. To everyone out there with Santander or any other sharks, just stay the course and everything will work out!
Congratulations. You are right to look at this as a step forward. If at all possible you may want to see about adding a little extra to your monthly payments to overcome the negative equity situation. It will make the next refinance all the easier.
@Project17 wrote:
My advice will be a little different then the rest..if you have gap insurance and I hope you do don't pay anything extra right now.. Any extra you would pay just take and put in the bank and when your ready to refinance down the road again use that money towards the principle then. The. Reason why is if your paying extra every month and then you total the car or it gets stolen you now have lost the extra money you paid into the car and saved the gap insurance company money which defeats the purpose of the gap to begin with. If you don't have gap then my advice is out the window.
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I don't recommend banking on a total loss. 99+% of the time you will be better off saving money by paying down your principle now. That will cut down your interest charges. The likelihood of a total loss is slim, so don't count on it and instead save money on interest.
Even making double payments each month would take a long time to recoup from thousands in negative equity.
Usually it is easier for people to pay extra each month than make lump sum payments annually. Also, it is better to make frequent payments as it reduces accrued interest. For example paying $100 per month vs $1200 at the end of the year. The $100 per month would cause there to be less accrued interest because the principle was reduced sooner.
Not sure how we got on the topic of gap, but...Often gap can be obtained affordable through one's auto insurance. Or through a third party provider.
Hey everyone, thanks for all the great advice! Sorry for the delayed response. I've been very busy the past few days. Honestly, I'm thinking about trading it in 3 to 6 months. I agree with Dustink. The negative equity is too much to overcome. Especially at 13%. It's not a 'keeper', so I'd rather not keep putting money into it if I don't have to. It's a Dodge Journey and it's too small for our family. We really rushed and bought it. We just wanted a new car so bad and didn't seek advice from anywhere or anybody! I think I should just eat the 5k on a trade. Get a very low interest rate. Then I'll start throwing extra money at the loan. What do you guys think?
I think you should throw as much money as you can at it. Try to get into equity by the time you trade it in in 6 months. Also get a down payment together so it doesn't happen again.
Congrats on the Refi! As usual DustinK has great advice.
Good Luck in the future, and I agree with making extra payments to try to get your equity back in the positive status.
Best of Luck to you!