What are the dangers to using a home equity line to pay-off a car loan? I have 200K+ in equity in my home and am thinking about paying off a
20K automobile loan with the a home equity line.I would continue to make the same car payment but pay them directly to the home equity line. This way, I can write off the interest and if I ever needed the money, could reduce my payments.
The only danger I can see is that if I ever needed to cash out the equity for an emergency.
Thanks for the advice.
I wouldn't suggest paying off your cars unless you are paying a ridiculous interest rate. Instead I would suggest you look into investing some of that equity to start earning you a high rate of return or use your equity line for a down payment on an investment property. Another option could be to look into converting your current mortgage into a Retirement Loan. A Retirement Loan would allow you to cash out money (for either investments or more property) and still lower your payment. Furthermore, a Retirement Loan will allow you to allocate a portion of your mortgage towards an interest earning account so that you can seize the financial opportunities you never knew existed with your current mortgage program.
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