read the small print

[Jonathan Rubins]

aaagh

So annoyed, wanted to pay down some of the finance on the 997 to reduce the silly monthly payments. Just been told that all it will do is decrease the balloon not the installments.........

Surprise surprise the finance guy never mentioned that. so angry with myself i really should know better :evil:


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[Parts]

Same with most loans to be honest, very hard to reduce the monthly payment. If you pay off the ballon, does it reduce the interest you also are paying on the ballon?

Might still be better doing that than putting it in the bank.


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[Jonathan Rubins]

so annoying though, I think i am more annoyed with myself

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[Tiptronic]

Quote: Originally posted by Jonathan Rubins on 06 September 2006

so annoying though, I think i am more annoyed with myself


Didnt you use one of the chaps on the fourm for your finance?

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[Jamie_G]

Jonathan,

With the finance that I offered you, it would have worked slightly differently. A normal balanced payment plan means that if you make an overpayment is reduces the capital outstanding but monthly's stay the same however I would of had the ability to represent the lump sum payment to the finance company and specially request a re-schedule of agreement for which they would have charged a small fee. I think you should go back to Porsche Financial Services (Bank of Scotland) and state that you have made a lump sum payment and you wish to reschedule the agreement to reduce monthly payments - ensuring that the interest rate remains the same.

Otherwise, see what the penalty interest is (mine is 10 days) and see if you want me to re-finance on your behalf with another funder and at cheaper rate.


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[Parts]

And there speaks the Oracle on all such matter...

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[Jonathan Rubins]

Jamie

let me get the details and email them to you when I have finished yelling at Porsche


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[Tiptronic]

IMO opinion,

ballons are the worst way to buy anything on finance, giving an opportunity for you to buy things that are way to expensive for your budget, this is why new car ownership has gone through the roof for the last 5 years, balloon finance, and the immortal words of GM, "We are buying future sales today" "What are we going to do tomorow?"

Deep Dodo, thats what in both Fords' and GM case.

Same has happened in houses though not with balloons, but with the loan to sallary rate, when I first got married it was 2.5 x joint income, now 8 x joint income is not rare,

What does this do, it pushes house prices up, as there is more people who can afford and more of a demand, doesnt do the economy any good in the long run though.

Peoples spending on credit has really collapsed over the last two years, the increase in credit card borrowing was only approx £43million ( if i remember rightly) in July, where as in the previous 6 months the average increase on total credit card borowing had been nearer £300 million, this is still well down on the rate of the previous year, (please note that this is the net increase on overall credit card borowing, however many billion that might be)

People have twiged that they cant live their lives on the never never, and the financial landscape is changing,

My friend who owns an investement group, manages a couple of billion, and he agrees though he doesnt care, because now he will have extra revenue from those who refinance the finance cos the cant afford it,

Finance right game to be in.

Johnathan, get out of the balloon if you can, otherwise you are paying interest twice./


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[Jamie_G]

I always advise people to consider reducing or removing balloon payment to save interest and improve equity however I look at the market in the sense that the people I deal with are typically professionals, high earning with assets and if they wish to match a finance deal with the depreciation of the asset and utilise their surplus cash elsewhere i.e. property investments (an appreciating asset) then so be it. What I think is irresponsible is banks lending balances of up to £25K no questions asked on an unsecured basis. Any tom dick or harry can get £15K approved on a credit card these days just to blow it and pay it off forever at APR's in excess of 13/14%.

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[Tiptronic]

Quote: Originally posted by JamieG on 06 September 2006

I always advise people to consider reducing or removing balloon payment to save interest and improve equity however I look at the market in the sense that the people I deal with are typically professionals, high earning with assets and if they wish to match a finance deal with the depreciation of the asset and utilise their surplus cash elsewhere i.e. property investments (an appreciating asset) then so be it. What I think is irresponsible is banks lending balances of up to £25K no questions asked on an unsecured basis. Any tom dick or harry can get £15K approved on a credit card these days just to blow it and pay it off forever at APR's in excess of 13/14%.

Cant disagree with your logic, provided they have the assets, IMO many dont, and buy because they cant afford the repayments without the balloon.




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[Jonathan Rubins]

with respect to my stupidity I would mention that I am in finance and should have looked closer, however if necessary I can simply repay or refinance, Jamie is correct it is simple economics as we are in property and I can do better with my cash that I am being charged by the finance co, but still I am a plonker

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[Tiptronic]

Johnathan,

I can understand the sense in both yours and Jamie, provided you have the assets you are better to invest them, I have done the opposite, and paid in full and now regret it, because I could have invested in something else,

you can never win I guess.


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[Robertb]

Its all about opportunity cost...

Suppose a loan costs 5% a year, by paying it off, you gain a guaranteed return of 5% a year. If you reckon you could do better than that, then it is of course better to finance.

But how much better? First, you 've got to consider what return you would need to compensate for the extra risk, plus you need to take tax into account- the investment will need to produce somewhat more than 5% after costs to make it worthwhile (probably well over 7-9% year on year to beat your risk free return of 5%). Also, with finance, you need to meet the payments each month- the cashflow from the investment may not be so regular.

It is a good point that you make Daz- borrowing to fund consumption just moves spending from the future to now. The idea of central banks deliberately triggering credit-led booms is that it gets the economy moving- shops do better, companies make more money and invest more, jobs are created, wages go up, tax revenues increase, joy all round. Until rates go up again...


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[Parts]

I think I'm going to have to ask Dad for a pay rise to fund the Turbo habit I want to have! :wink:

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[Rob J]

Quote: Originally posted by So Poo on 06 September 2006

I think I'm going to have to ask Dad for a pay rise to fund the Turbo habit I want to have! :wink:

Mine won;t give me an advance on the inheritance....no matter how often I tellhim it'll be cheaper in the long run & avoid all that inheritance tax I'll have to pay :roll:




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