Need some help with a refi.. please read

[kevinwholder]

I recently posted here regarding a situation with my 2003 Saturn L200... I will recap for you..

 

Back in May 2003 I purchased a 2003 Saturn L200 (tricked out with all the bells and whistles) and got it at a great price ($3k below invoice - my price was roughly $20,500). LOVE this car and no complaints other than not being told that 2003 was the last year that the L200 was being manufactured. They are only manufacturing the L300 now (sister car - no visual difference) but they rolled this model into that product line. Anyhow, with this happening my trade-in value and retail values dropped A LOT..

 

At present I am roughly $8k upside down on this car. I KNOW, I should have checked this out but I did not and accept responsibility for that.. I should have known better..

 

Here is the situation.. When I financed this car my scores were in the ole toilet.. LOW 600's in the auto-enhanced fico category!! NOT FUN.. Well, HH Automotive financed me at the lovely rate of 13.95%.. Scary huh?

 

Well 13 months have past and afer finding this GREAT site I have cleaned up my reports and proudly boast that I am now in the 700 club.

 

I was looking at a refi on the loan and cotnacted DCU, naturally :-), and they approved the refi loan at 4.49% :shock: ... HOWEVER,, they will only finance 120% of the NADA value and I was advised that would be a total max finance avail of $15,600.00.. I called HH Auto to confirm the payoff amount and was advised it is $19,346.00.. Leaving me with alomost $4k to come up with out of pocket if I do refinance with DCU.. BUMMER!!!!

 

Well, I called HH Auto back and the rep asked me a few questions and I did the same and he took some info from me and advised they would review my EQ report (my best at 711) and would call me today to see if they could lower the interest rate. I told him wht DCU had offered me as well..

 

My question; do you think HH Auto will lower the rate MUCH LOWER from where it is now to at least compete with DCU? I would love to take DCU up on their offer but I do not have $4k right now in available cash (only on cards and o not want to go that route). Also, can you guru's think of any other possible options for me to look at???

 

I had thought about looking at buying a new (demo) models that have really good rebate offers going so I could get the rebate plus a little extra because of it being a demo to help kill the neg equity in my current car.. But not sure about this route..

 

THANKS SO MUCH... YOU ALL ARE THE BEST

[MarvBear]

HH already has your loan collaterilized. I strongly doubt that since this is the case they would offer a reduction in APR. What is the incentive to them? Nothing! Betting they ignore you or put you on permanent hold.

 

When anyone is upside down in any vehicle the only way out is cash, whether that is your cash or a cash incentive from the mfg. If you go that route you WILL STILL BE UPSIDE DOWN although likely at a more reasonable rate.

 

IMO, if you are confortable with the payment and it is not burdensome and you have a 60 month loan with HH, I would ride it out to the 30-36 month point. Somewhere around that point you should reach a much more reasonable break even point in the loan compared to the worth of the vehicle. Then trade it or refi it then. As an added benefit to this course of action the HH tradeline will build up a long term positive tradeline for you if paid appropriately.

 

It is a catch 22 position. You have high credit scores NOW and QUALIFY for lower rates but not the available cash for a refi. I would strongly recommend you not put the cash differential for the refi on a credit card.

 

If you do manage to sucessfully trade NOW, you will start the entire process over again although at a lower rate. A vicious cycle on a depreciating asset. I would venture to say, you would still be upside down NOW even if you had intially financed with one of the CU's.

[karl_tone]

It would be nice if auto loans were like home loans, where you could reduce the outstanding high interest balance with the 15k from the CU, and only have the difference at 13%. I assume that this wont work with auto loans because the asset loses value so no one wants to be in the "secoond" lien holder position. Will the CU grant a personal loan at the low rate?

[MarvBear]

My cu's personal loan rates are higher than their Auto Rates.

 

I do not know if true in all cases though.

[kevinwholder]

well, i made my decision.. I decided NOT to pull money from my credit cards to cover the amount I am upside down on to ref with DCU..

 

instead I did call Household and, believe it or not, I actually got them to lower the interest rate on my loan 3%!! My EQ score is around 711 and have not a late payment with them AT ALL on this loan or the lat loan I had.. Three years of perfect payment history!

 

Not the greatest decrease in interst I culd hope for but a $35 saving per month is better than nothing.. I will just keep paying them what I was paying before and will just apply that extra $35 per month to paying off the principal!

 

Not the greatest solution, but it works for now

[MarvBear]

Kevin:

 

Very glad it worked out that way for you.

 

Congratulations.

[kevinwholder]

happy to update this..

 

started out with Household auto at 13.4% @ $441 per month and Household lowered it to 10.4% @ $411.00 upon calling them to ask for a refinance..

 

That was good enough for me but I had to see what else I could do.. So, I submmited an application online at lendingtree.com and e-loan offered to refinance the entire balance at 7.99% @ $388 per month.. I ACCEPTED

 

So lowering my loan about $53 bucks per month was a TRUE SUCCESS.. I could not have done it without all the help from this board!!!!

 

T H A N K Y O U

[MarvBear]

WOOOOOOOOO HOOOOOOOOOOOOOOOOo

 

 

Good way to go.!