Opinions needed: my financial well being is in your hands!

[greg75vette]

Alright maybe not that serious, but I do ask a very important question. But here is some back ground first...

A lot has changed in the last few months. I'm now engaged, planning (as well as partly paying for) a wedding and my vette is falling apart (more than normal).

As some of you have responded on, I have a thread on a possibly chipped ring gear on my flywheel, which would wind up being a flywheel/clutch/throwout bearing replacement project (assuming I do have said damage). This got me thinking. I plan on doing an LSx/T56 swap to this car. I bought my '75 with that intention. However, I find that I cannot save fast enough to make it happen all that soon. But this flywheel issue (and my throwout bearing has been squeaky since I bought the car 2 years ago) will just drain more out of what I have, thus postponing the swap even larger. To aggravate the issue more, I have said wedding to save for (may 2011). It's a ways away, but now is the time to start saving.

This has made me realize that if I'm going to do this swap it won't happen for a long time (due to the wedding). And in the meantime, I'm sure more things will break, some being things that would be replaced in the swap which will just drag on the delay of the swap.

So the brilliant idea struck my Fiancee (so fancy) to check out loans. Now I know what a lot of you will think of this off the bat, just like I have. Why the hell would I willingly pay the f%#$*!@ bank money?? Well, if I can keep the interest rate down, (<10%) and the term length short (48mos), the interest is significant, but not a deal breaker. Here's why: At 10% interest over a 48 month term, if I borrow $8500, I'll pay $1850 in interest. Seems like a lot, but think of it this way, how much will the clutch/flywheel/to bearing run me plus what else I find? My front and rear main seals are moist (not dripping) and the engine is at 110k miles, so how much does a rebuild cost? Why fix these when they'll just sit in my shed after the LSx swap?

This to me is my cost of avoidance (apparently real as my boss taught me yesterday. Power plants use this comparison all the time). It will cost me less to borrow the money and do the swap now, than save up for 48 months and repair as needed.

A side benefit to this is it would 'lock' what was going to the vette in terms of savings (because it would be a bill, not a deposit) which means the wedding fund couldn't cannibalize my vette saving account (yes, I have one just for it and other accounts of mine have sticky fingers sometimes).

Does this sound logical? I know logic and C3's rarely mix, but is this a real option to you guys or just asking for trouble? As an FYI, I would never bite off more than I could chew. If I couldn't afford the loan, I wouldn't go for it.

 

[mrvette]

Two ALL important questions.....is your JOB totally secure???
and do you presently own a house you like, one with a garage you can work in without killing yourself???? hopefully close to work so you won't die from lack of gas.....

IF either is NO, time to retrace your entire thought process, but that's just ME....

for ME, my first thought was always HOUSE (with workable garage) as #ONE....

all else went to hell until then....

:thumbs:

 

[SmokinBBC]

Two ALL important questions.....is your JOB totally secure???
and do you presently own a house you like, one with a garage you can work in without killing yourself???? hopefully close to work so you won't die from lack of gas.....

IF either is NO, time to retrace your entire thought process, but that's just ME....

for ME, my first thought was always HOUSE (with workable garage) as #ONE....

all else went to hell until then....

:thumbs:

"This to me is my cost of avoidance (apparently real as my boss taught me yesterday. Power plants use this comparison all the time). It will cost me less to borrow the money and do the swap now, than save up for 48 months and repair as needed."

This may be true in business...but not in hobbies.


I'm with Gene on this one. Only 3 things I ever financed. School, house and new car. And it really hurt me to pay those guys so I could drive....house and school I had no problem with.

You can do a lot with $1850...why give it to the bank? If you can pay back >10k over 48 months then you can afford to save up and wait to do the things that need to get done on the vette.

And what you gonna do if you need another 2k after you spend the $8,500? Be wary of going down the path of high interest loans, credit cards, etc. If they start to pile up, you'll be in deep shit in no time.

JMHO.

 

[1Michel]

I wouldn't borrow for the car. It's a hobby.

This is the main reason why I take so long to build my car.
I literally buy the parts one by one and only if I have the money in my hands.

Sure it takes forever considering the economical contex but it's also part of it.

you know, a lot of times when you want something like that, the wait is more satisfying. I mean it's way more gratifying when it's finaly finished plus it gives you time to plan things better.
With a good plan you waste less money on trial and errors and if theres an area where a lot of us tried and crashed, thats right here with this hobby.

It's a hobby, dont forget it!

 

[greg75vette]

And Precisely what I was getting at. I am very weary of all those things. I currently only finance my car and two student loans and have no credit card debt (besides what I rack up for the month, which is paid off every month, like cash). So to me, this is all knew and I must admit very tempting.

I also share your fear of me going over budget. I do believe I can have it done for wel under that, but I do have a little over $2k now in the vette savings.

I know a lot can be done with $1850, but I also know that at least $1850 can go into an engine/tranny that I don't plan on using. We all know how these cars can be in terms of repair. As for the current track record of the car, that's coming quick!

I didn't mention, but probably should have, the fact that with or without this loan, I am and have been for quite some time been saving for a house, repair to said house, "rainy day" savings, retirement, life insurance and starting today, the wedding. I currently save more than what the loan would be a month (with the above example) for the vette alone. So I would be still continuing to save.
Also with the house, I have to wait on it simply becuase I have to wait for the current owner to retire and move out before I can buy it off of him. However, he has pushed his retirement out to, ironically, around may 2011. That's when I get the garage, haha. I don't have the heart to kick out what is currently in the garage, since I grew up with that too.

So what else is a thought?

 

[MYBAD79]

$1850 - that's enough for a Goodwrench engine and a new flywheel/clutch....

Murphy's law says that once you're done with the LS1/t56 conversion and you make payments for the $8500 loan the differential or something else will break - do not take a loan for a toy, just my humble opinion.

 

[MYBAD79]

So to me, this is all knew and I must admit very tempting.

That's exactly how they "work"....

 

[greg75vette]

1Michel, I see your point about research. Like I mentioned, I bought this car with this swap in mind. I thought I would be unique. Right around the time I bought it I signed up "another corvette" forum and not much later, someone started a thread dedicated to the swap and what's involved. Learned a lot from that. A lot that would have burned me bad. Over the last two years, I have continually refined what I would like done and how to do it. The learning has never stopped. I've always been sponge-like.

I hear the hobby argument. That was why I never really considered it at first.

And I absolutely hear Murphy's Law. I didn't name my car Pandora for nothing.

Now if I could only deposit my vette savings into something that would bite anything that tried to remove it...
Mutual funds were another thought, but that is I think longer term that I'm willing to go. Glad I didn't set that up two years ago!

 

[turtlevette]

you're going to need a down payment on the house.

i'm guessing what? 20% of 500k. I doubt there's much for less than that on Long Island.



you got 100 grand saved yet?

 

[greg75vette]

you're going to need a down payment on the house.

i'm guessing what? 20% of 500k. I doubt there's much for less than that on Long Island.



you got 100 grand saved yet?

Well for one, LI doesn't have the kind of market currently. Not even close in most areas. LI is what one would call a soft market. There are very few $500k houses near me. Ours is significantly less.
Second, I'm taking over the mortgage to finish out it's 25+ years remaining. There are closing costs, but I don't need to put down 20%.

 

[mrvette]

you're going to need a down payment on the house.

i'm guessing what? 20% of 500k. I doubt there's much for less than that on Long Island.



you got 100 grand saved yet?

Well for one, LI doesn't have the kind of market currently. Not even close in most areas. LI is what one would call a soft market. There are very few $500k houses near me. Ours is significantly less.
Second, I'm taking over the mortgage to finish out it's 25+ years remaining. There are closing costs, but I don't need to put down 20%.

A couple of MBA bankers with some 6 years each in the mortgage banking business taught me this trick ten years too late for me, I lost too much money in other businesses.....what the trick is....

to find a house in foreclosure BEFORE the bank actually does the dirty....that way you catch up the payments and you set up a TRUST, that trust is filed with the .gov agency as being the 'new owner' of the house, put the name of the trust as same as old ownder...the John Doe trust....so that is filed with the .gov, and of course copies to the mortgage bank, they will think nothing of it, especially these daze, and file it in the folder along with the rest of the paperwork...., NOW, when you make the payments on the mortgage, you can make them from ANY account, it goes to the payment dept of the XYZOO bank, think that clerk cares which account that payment comes from??? hell no, payment accepted and so house is yours....

the trust papers are very rarely if ever actually read over by the bank, get a real estate lawyer....that ensures you can keep that trust forever....YOU/wife are the BENEFICIARY of the trust,

now YMMV with state laws, but that's how it's done here in Florida....had I known that trick some 12 years ago, today I"d be a millionair, and that's no lie, either....

:hissyfit::hissyfit:

 

[greg75vette]

Funny you mention that Gene because that was a similiar skirt around that I was going to do that my financial adivsor recommended. The drawback to the one I would do is the current owner (if you haven't guessed by now, my Father) would continue to be the owner as I was placed on the deed, the house would me placed in a non-reversable trust and I would make the mortgage payments. Like you said, the bank doesn't care who pays, as long as the chekc doesn't bounce and it's on time. ...It does help we have the same first and lasdt name as well as our middle initial... The only down side to that whole process was I would not get full credit for the house until my father passed, as I was the beneficiary of the trust. Only then would the house be mine. Which means I wouldn't be able to claim interest on my taxes and I would officially be a tennant.
The advantage? Don't have to officialy transfer the house and have it count as a sale.

We have since abandoned this idea since I can assume the mortgage. Makes life a little easier.

But still a very interesting trick there Gene. I may have to invest in some property haha.

 

[mrvette]

Funny you mention that Gene because that was a similiar skirt around that I was going to do that my financial adivsor recommended. The drawback to the one I would do is the current owner (if you haven't guessed by now, my Father) would continue to be the owner as I was placed on the deed, the house would me placed in a non-reversable trust and I would make the mortgage payments. Like you said, the bank doesn't care who pays, as long as the chekc doesn't bounce and it's on time. ...It does help we have the same first and lasdt name as well as our middle initial... The only down side to that whole process was I would not get full credit for the house until my father passed, as I was the beneficiary of the trust. Only then would the house be mine. Which means I wouldn't be able to claim interest on my taxes and I would officially be a tennant.
The advantage? Don't have to officialy transfer the house and have it count as a sale.

We have since abandoned this idea since I can assume the mortgage. Makes life a little easier.

But still a very interesting trick there Gene. I may have to invest in some property haha.

Well, hope someone can benefit from the knowledge, ans that shit varies from state/state obviously.....:hissyfit: for the knowledge 12 years ago...

damn if anyone here would think of that, all them mortagae/real estate/finance/banking/credit union/RE Lawyers... people I talked to and not ONE hinted on anything about how to actually DO a freeking deal....useless lot if ever I saw one....thanks for nothing...and they could have made damn good money off it too....

:crap:

 

[greg75vette]

If we only knew some of the wonderful tricks of the rich.

SO who else has an opinion? Let's hear it

 

[turtlevette]

you're going to need a down payment on the house.

i'm guessing what? 20% of 500k. I doubt there's much for less than that on Long Island.



you got 100 grand saved yet?

Well for one, LI doesn't have the kind of market currently. Not even close in most areas. LI is what one would call a soft market. There are very few $500k houses near me. Ours is significantly less.
Second, I'm taking over the mortgage to finish out it's 25+ years remaining. There are closing costs, but I don't need to put down 20%.

The fact that your daddy is giving you a house makes the decision easier. You're a mechanical engineer probably pulling down 60-80k a year.

Get the loan, take money out of savings or borrow against your ira/401K. You're in good shape. Have fun.

 

[68L71]

I would not get a loan for a car...especially a toy car.

 

[redvetracr]

my suggestion...sell the Corvette and buy a minivan, your going to need one sooner or later....

 

[mrvette]

my suggestion...sell the Corvette and buy a minivan, your going to need one sooner or later....

:crap::lol::lol::lol:

I thought that for a second, but did not include it.....way the economy is now, he going to NEED every penny....

 

[big2bird]

my suggestion...sell the Corvette and buy a minivan, your going to need one sooner or later....

Yep. Once your married, unless she REALLY likes them, it's history anyhow. You can be it back for $100,000 when your 50 and the kids are out of college.

 

[mrvette]

my suggestion...sell the Corvette and buy a minivan, your going to need one sooner or later....

Yep. Once your married, unless she REALLY likes them, it's history anyhow. You can be it back for $100,000 when your 50 and the kids are out of college.

U dirty bird, quit shitting on the kid's nest....

:hissyfit::lol::lol: