Should I refinance my car?

My mom financed a car for me last year. She is the primary person on the account, and I was a co-signer, because I had just graduated from college and didn't have a good job yet. Now I am finacially settled, have good credit, and have paid all but $3,200 of the $7,000 loan back. The monthly payment is $140.00, but I have been paying at least twice that every month since I have been working because there is no early repayment penalty and the car loan has the highest interest rate of all my debt at 6.0%. She wants to sell the home I grew up in to buy an empty nesters townhome for herself. She wants to take out a mortgage for this, and I am worried that the loan she took out for me will affect her ability to get a good mortgage rate. Should I refinance my car so that it is in my name? Should I roll it in to a debt consolidation loan with my student loans (only other debt)? Is $3,200 at $140.00/ mo too small of an amount to affect the mortgage rate that she will qualify for?

The prime rate and your credit score is what determines your mortgage rate. I would not refinance. When you get a loan the majority of your interest is paid first. Very little comes off of the principal. If you refinance you will have to start all over with the interest. I would see what you can do about paying more each month. Make sure that on your payment coupon you put the extra money down as towards the principal. Some financial institutions do not automatically do that. I would not roll it over into your student loans. As for being too small of an amount to affect getting a mortgage, it depends on what other bills she has. It won't affect getting a loan if she has good credit but it does affect how much you can borrow. You can only owe a certain percentage of your income to get a loan or they consider you overextended and not a good risk. Keep up the good work on your credit history. With good credit you can get lower interest rates on your loans.

i would refinance just me...

I don't think that a $3200 outstanding balance on a loan with good payment history is going to affect her ability to buy a house.

And NO - DON'T ROLL OTHER DEBT INTO IT. There is no good reason to shuffle debt around. PAY IT ALL OFF..

Make the minimum payments on every one of them. On the lowest dollar value, put all your extra effort toward paying it off. Once it is paid off, then roll that extra money to the next largest balance. Continue this snowball until all your debts are paid off.

Go to the library and get "The Total Money Makeover". Read it and follow it carefully.

Go check out Dave's website as well.

Yahoo is blocking the link for Dave's website for some reason. Guess they don't want people to use sound money methods?!?!?

It is www . dave ramsey . com without the spaces

Talk with your mother about it. You can't get a refinanced loan for 6%. Whether or not it affects your mothers loan would depend on her credit score. It sounds like she is downsizing her home so it shouldn't be a problem for her. If you are doubling up on the payments it will be paid off in less than a year so I would say no to the refinance.

First of all 6 percent is good. Second, your mother doesn't owe that much on the car, so I don't believe it will affect her ability to get a low interest rate. The interest rate is determined on many variables, but one is her credit, income, debt, etc. If it were a twenty or thirty thousand dollar vehicle, I would recommend a refinance, but not for 3200 dollars. Good luck.

Whether you finance a car or mortgage, you will pay about 70% in interest of the first half of the life of the loan. Since you made double payments, it's safe to say you paid most of the interest. I suggest that when your mother sells the house to buy a condo, let her give you the money to pay off the car and just pay her back as quickly as possible.

Hi,

In my view, you should go for a proper debt consolidation. Otherwise it will too messy. Check out http://financeguru.consumerspot.info for some useful info and tips for a better debt management. Good luck!