Finance time on a car is limited due to the depreciation on the car. The value of the car drops steadily once it is driven off the lot. Doesn%26#039;t make sense to pay longer than 5 years on a car when, in 5 years, it isn%26#039;t worth but a fraction of what you paid for it.
A house, on the other hand, appreciates so the longer you have it, the more money it is worth making the longer payback period worthwhile.
Why can you finance a $40,000.00 car for 5 years and have to finance a $40,000.00 house for 20 or 30 years?
For one, you are not likely to find a house for $40,000. You have a longer repayment period of mortgages because the loans are for larger amounts.
Why can you finance a $40,000.00 car for 5 years and have to finance a $40,000.00 house for 20 or 30 years?
Actually, most places will go 7 years on a new car now...and as the prices continue to rise, they will have to continue to do longer terms on financing.
Why can you finance a $40,000.00 car for 5 years and have to finance a $40,000.00 house for 20 or 30 years?
Solution is, make a contract where there is no penalty for early payment on loan and pay up in 5 years.
You will save almost the same amount of money.
Why can you finance a $40,000.00 car for 5 years and have to finance a $40,000.00 house for 20 or 30 years?
A lot depends on your credit too. If you can truely afford a $40,000 car, you should have good credit. People buying the less expensive homes are more likely to have worse credit.
Why can you finance a $40,000.00 car for 5 years and have to finance a $40,000.00 house for 20 or 30 years?
no you don%26#039;t have longer car notes because after 5 years of driving the car isn%26#039;t worth enough to secure a loan.
Why can you finance a $40,000.00 car for 5 years and have to finance a $40,000.00 house for 20 or 30 years?
Because a car devaluates very quickly. If you default on the loan prior to the end, they want the worth to be able to cover the remainder of the mortgage. Real estate, on the other hand, increases in value over time. Thus, it%26#039;s much safer to offer a loan over a much longer length of time and get much more interest in the process. This is also why home loans are generally at a much more attractive percentage rate. Lastly, most home loans are for a much higher amount than the typical auto loan. $40K would buy you a nice doghouse in most major cities.
Why can you finance a $40,000.00 car for 5 years and have to finance a $40,000.00 house for 20 or 30 years?
A house will last for 30 years. A car won%26#039;t.
Why can you finance a $40,000.00 car for 5 years and have to finance a $40,000.00 house for 20 or 30 years?
You have the question backwards. It should be:
%26quot;If you can finance a house for 20 or 30 years why can you only finance a car for 5 years?%26quot;
First of all, cars tend to be a depreciating expense, whereas a house is an appreciating asset. These are two different animals.
You would not have to finance the house for 20 or 30 years if you did not want to. You can always prepay the loan, and there are programs available to finance a house for 10 or 15 years (a house is usually much more expensive than a car).
Why can you finance a $40,000.00 car for 5 years and have to finance a $40,000.00 house for 20 or 30 years?
home/property values continue to increase over time and it is a different type of loan altogether and quite a long process to buy a home. With a car its nearly instant and done straight through a bank or auto finance company.
Id be scared of a $40,000 house, havent seen those kind of prices since the 1970%26#039;s, the average where I am are $300,000
Why can you finance a $40,000.00 car for 5 years and have to finance a $40,000.00 house for 20 or 30 years?
YOU DON%26#039;T %26quot;HAVE%26quot; TO FINANCE A HOUSE FOR 20-30 YRS YOU CAN PAY CASH OUTRIGHT IF YOU WANT TO. THE REASON YOU CAN%26#039;T GET A LOAN FOR A CAR FOR 20-30 YEARS IS BECAUSE THE DEPRECIATION OF THE CAR MAKES IT LESS THAN APPEALING TO THE BANKERS (IN FACT THEY%26#039;D BE LAUGHED RIGHT OUT OF THE JOB IF THEY TRIED TO DO IT)THE CAR WOULD BE LONG GONE BEFORE THE LOAN WAS EVER PAID OFF %26amp; SO WOULD YOUR INCENTIVE TO PAY OFF THE LOAN. FOR THE RECORD I%26#039;D LIKE TO KNOW WHERE YOU%26#039;RE FINDING $40,000 HOMES THESE DAYS?
Why can you finance a $40,000.00 car for 5 years and have to finance a $40,000.00 house for 20 or 30 years?
It has to do to the depreciation value. Land will never depreciate unlike a car.
Why can you finance a $40,000.00 car for 5 years and have to finance a $40,000.00 house for 20 or 30 years?
You cannot buy a house with $40,000.00 unless is a house seized by the United States Of America.
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