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Refi with 175% LTV?

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Established Member

Re: Refi with 175% LTV?

I'll do the research on that thanks. As my credit scores increase, would you suggest maybe a lease down the road? Obviously rolling into another finance would be disastrous, but my long term plan was maybe at the 54-60 month mark trading it in for Audi, that would hold the remaining negative equity better.
EX - 637/TU - 611/EQ - 608
NFCU - $3,000/CapitalOne - $500/Continental Finance - $500/First Premier - $500/Celtic Bank - $300/JC Penny - $6,200/Comenity (Express) - $500
Message 11 of 24
Valued Contributor

Re: Refi with 175% LTV?

Frankly I don't know what your income looks like. If you're making more than 75k or 100k per year then I think an Audi lease is probably fine. If not in the six digits, I personally wouldn't recommend an Audi or fancy car. Plenty of cheaper, very reliable cars (eg Accord, Civic, Camry...) out there that would be more financially wise imo. Cars are depreciating assets and having a large one compared to your income really makes it hard to build wealth/savings.

Not sure what you mean by hold the negative equity better...European cars depreciate quickly so I would think the opposite. Besides after 60 months of payments, I dont think you'll be very underwater here.

In terms of lease it's sort of a math equation you just need to work out (see my FAQ in this thread and make liberal use of the leasehackr lease calculator). As an example, Kia is offering 4k of lease incentives on the Forte that you don't get if you buy. If I were in the market for a Forte, I'd lease and then immediately refi / buyout with my preferred CU the week I drove off of a dealers lot. Leasing also frequently makes sense for European cars because they struggle to hold value and there's often pretty juicy incentives offered.
Message 12 of 24
Established Member

Re: Refi with 175% LTV?

Resurrecting my topic as my situation has altered a bit.

 

So I recently got approved for the Discover It card and they gave me $10,500 off rip with a 0% introductory for the first 14 months. I'm seriously thinking about taking $4000-$5000 of it for a cash advance and dropping it on the car so I can refi. I'll have a lower interest rate and I should have some positive equity no more than a year later. On the other hand, I can aggresively pay down Discover for that introductory 14 months and then take the "hit" for the second year if I don't pay it off within the  introductory period. My math may be a little sketchy but say I pay it off in 6 months that makes for a relative interest of about 4-6%? Is this a smart move?

EX - 637/TU - 611/EQ - 608
NFCU - $3,000/CapitalOne - $500/Continental Finance - $500/First Premier - $500/Celtic Bank - $300/JC Penny - $6,200/Comenity (Express) - $500
Message 13 of 24
Valued Contributor

Re: Refi with 175% LTV?

First thank you for your service.  Your in a tough spot but your instincts to use another financial tool to get the LTV down enough to refi exactly what I would do.  I am not sure if Discover will let you do a cash advance at 0%, generally those introductory rates are reserved for purchases and balance transfers but it is certainly worth considering.   The other option you could consider is a checking line of credit with NFCU, the rate is generally around 9% but that can be a good tool to get you where you want to go.  

 

Let us know how this works out.

Message 14 of 24
Frequent Contributor

Re: Refi with 175% LTV?

Try Cap One as well
Message 15 of 24
Regular Contributor

Re: Refi with 175% LTV?

Hi Substandard,

I actually work at a dealership as a Finance Director in Kansas so I might be of some insight.

What's your payoff balance, estimated TU score, vehicle, mileage and city of residence?

Starting Score: (5/01/2017) -- EXP: 495; TU: 445; EQ: 460
Current Score (07/29/2019): EXP: 692; TU: 704; EQ: 674

Target Red - $800
Discover It Cash Back - $1000
Discover It Cash Back - $4000
Capital One Quicksilver - $700
US Bank Cash+ Visa Signature - $1000
Nordstrom Credit Card - $2500
Message 16 of 24
Established Member

Re: Refi with 175% LTV?

It's a 2017 VW GLI with 40,140 miles

 

Payoff is $30,421.45. Financed through VW Credit.

 

My estimated TU is 660

 

I'm currently overseas right now but I'm stationed at Fort Riley, all my mail/bills however still go to my Home of Record in Florida.

EX - 637/TU - 611/EQ - 608
NFCU - $3,000/CapitalOne - $500/Continental Finance - $500/First Premier - $500/Celtic Bank - $300/JC Penny - $6,200/Comenity (Express) - $500
Message 17 of 24
Regular Contributor

Re: Refi with 175% LTV?

Alright, I'm pulling up NADA Clean Trade: $15975, NADA Clean Retail: $18500.

Do you have any cancellables you can get rid of? (GAP, Extended Warranties, etc.) I can't imagine you being this upside down from just an MSRP purchase and sales tax.

 

At a 660 Transunion you'll score Tier A/B with most lenders - I know U.S. Bank will pick you up and they allow for 145% of NADA Clean Trade which might be your best bet. I would recommend doing a balance transfer for a decent chunck of your auto loan balance to your Discover and refinancing or hopping in a lease and using dealer cash to cover up the negative equity.

Starting Score: (5/01/2017) -- EXP: 495; TU: 445; EQ: 460
Current Score (07/29/2019): EXP: 692; TU: 704; EQ: 674

Target Red - $800
Discover It Cash Back - $1000
Discover It Cash Back - $4000
Capital One Quicksilver - $700
US Bank Cash+ Visa Signature - $1000
Nordstrom Credit Card - $2500
Message 18 of 24
Established Member

Re: Refi with 175% LTV?

The issue was I traded in about $4000 in negative equity from my previous loan. Car was wearing out on me and I had to find a car that could carry that amount of negative equity which no used vehicle(within my budget) would do; so boom, $30,000 car purchase. I have GAP, but eliminating that seems like a risk that could bite me should disaster strike. But the balance transfer sounds like a good idea, I'll make a decision in the coming months.

EX - 637/TU - 611/EQ - 608
NFCU - $3,000/CapitalOne - $500/Continental Finance - $500/First Premier - $500/Celtic Bank - $300/JC Penny - $6,200/Comenity (Express) - $500
Message 19 of 24
Regular Contributor

Re: Refi with 175% LTV?

Us dealers are notorious for screwing buyers so on your next vehicle purchase here's a few tips: 

 

When you go to trade in your vehicle, demand they give you at least clean trade for your vehicle. Dealers will offer you $1,000 behind rough trade to try and steal the car and it's just unfair because consumers don't know better.

 

Dealers can make money in so many different ways. Most franchise stores have a pack of at least $1,500 and a doc fee (a Hendrick store nearby has a doc of $699) and that right off the bat is gross profit in their pocket. They has get a significant amount of money (dealer cash) for throwing you into the lease and that can be used to cover up your negative equity as well, bonus cash for hitting a certain number, rate participation, etc. Take for example I just leased a 2019 Acura TLX. Luckily I have a friend that's a sales manager at the store and knew there was roughly TEN GRAND in dealer cash available for putting me into the lease there. You're **bleep** right I used that to cover up the negative equity. Don't be afraid to push boundaries. I always leave about $1,000 of gross for the dealer (cause people have to make money too) and strip them down as much as possible from there. Come down to the Kansas City area and I'll help you out - I have tons of connections with dealers. :-)

Starting Score: (5/01/2017) -- EXP: 495; TU: 445; EQ: 460
Current Score (07/29/2019): EXP: 692; TU: 704; EQ: 674

Target Red - $800
Discover It Cash Back - $1000
Discover It Cash Back - $4000
Capital One Quicksilver - $700
US Bank Cash+ Visa Signature - $1000
Nordstrom Credit Card - $2500
Message 20 of 24
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