- Aug 10, 2002
- 5,847
- 154
- 106
I lease a car now and I just made one of my regular monthly payments. I intend to buy this car when the lease is up, and I have 20 more lease payments left. So from now, another year and 8 months. I looked at my credit union and the interest rates they are offering for second mortgages are practically a steal, i mean extremely attractive. I intend to take out a second mortgage on my house for approximately 10-12K and use those funds to buy the car out at end of the lease.
However, in 20 months, I am not sure I will be able to pull the same interest rates on a second mortgage like I can today. Therefore what I propose, is to to take out the second mortgage sometime soon so I can enjoy the great rates. Put the 10-12K in some kind of interest bearing CD for 20 months or whatever is the best time period offered that will coincide with end of the lease.
When end of lease comes, I liquidate the CD and use that to buy out the car, while I pay down the second mortgage at this great interest rate.
I'd rather borrow money through a second mortgage than go for a auto loan, since auto loans carry several times higher interest rates, plus the interest on a mortgage is tax deductible.
Any flaws in this line of thinking? Thanks...
However, in 20 months, I am not sure I will be able to pull the same interest rates on a second mortgage like I can today. Therefore what I propose, is to to take out the second mortgage sometime soon so I can enjoy the great rates. Put the 10-12K in some kind of interest bearing CD for 20 months or whatever is the best time period offered that will coincide with end of the lease.
When end of lease comes, I liquidate the CD and use that to buy out the car, while I pay down the second mortgage at this great interest rate.
I'd rather borrow money through a second mortgage than go for a auto loan, since auto loans carry several times higher interest rates, plus the interest on a mortgage is tax deductible.
Any flaws in this line of thinking? Thanks...