Financing for a first time buyer

I think you will not have an issue getting a loan. You have a decent credit score and from what you have said have the income to qualify.

If you have a parent who was in the military you can qualify for Pentagon Federal. www.PenFed.org They have great financing on cars.

Now with that in mind... I have no idea of your situation and please take this with a grain of salt... but perhaps you might think of holding off on the toy and pick up a house while rates are so low and there seem to be some good deals in real estate.

It is the idea of buying an asset with a potential for appreciation vs a definite depreciating asset. (Tell that to all the folks who bought real estate in 06 and are under water! I know.. I know) The 02 -03 575 Maranello still has downside and is not at an investment level yet. You may want to wait and buy your toys in cash... that is a rule I have always lived by.

But who am I to divert anyone from wanting to buy a Ferrrari?? Just my .02....

 

I financed thru JJ Best. It was over 7 years ago, but their rate was the best I could find at the time. It was around 4.5%.

 

Get a line of credit on the house. Cheapest money you'll ever see.

 

If you insist on financing the toy, the best bet is to refinance the house and take a mortgage. Rates are at historic lows - < 4% for a 15yr mortgage and the interest is tax deductible.

 

try this- http://www.woodsidecredit.com/Apply.asp
I never used them but heard alot of good.
I think we met on sat. I had the red 430

 

I don't favor partially financing a car with a home line of credit - default on the "car payment" and you risk losing the house.

 

Right, the home equity line is a risk, unless you feel confident you can pay it off.

The conundrum you have is there's not enough credit history to rank you higher. That being said, 700's is pretty good, and with no outstanding debt, getting a loan shouldn't be an issue. I say "shouldn't", but with the way the banks are being stingy with credit these days, it's possible you might get shut out - don't be surprised.

As a point of reference, both my wife and I have credit scores in the 800's, yet our small online business was rejected for a renewal of a small biz credit card that we let "expire". The credit limit was nothing, and we just needed it for inventory purchases.

Hopefully, there's no issue - I'd be interested in hearing which path you take and hopefully it will work out!

 

H E L O C - You gotta love when Uncle Sam gives you money back for buying a Ferrari. Not only that, the money is practically for free ( 4% ) No convetional loan will ever give you that rate for a car, not to mention you can lock in a term for 10 years which would make your payments pretty low.

 

Ankur

If you are buying the car from an authorized Ferrari dealer, I suggest applying for a loan with Ferrari Financial Services (FFS). Hopefully, it is not too late based on BofA's rejection of your application. Although the interest rate might be higher with FFA than at other financial institutions or banks based on your credit score, FFS is an affiliate of FNA and knows the pre-owned Ferrari market better than any other lender. In addition, with FFS you can extend the term of loan for as long as 84 months based on an individual's specific situation. Some banks are willing to make a loan only on new Ferraris. Many are not interested to make a loan in any event whether new or pre-owned.

I would not consider leasing unless you definitely have made up your mind to purchase the car for the residual value (RV) at the end of the open end lease. Otherwise, the stated interest rate for an open end lease can easily result in an implicit interest rate of 3x-4x the stated interest rate at the end of the lease if you do not purchase the car for its stated RV.


Walter

 

Depending on credit worthiness, interest rates at Ferrari Financial Services start in the 6+ percentage point range. 8.99% may apply to someone FFS views as less credit worthy than a Tier 1 applicant.

 

Besides the purchase price, taxes/DMV/insurance fees, plus possibly car transportation costs, don't forget the set-aside for the first couple years of maintenance. I don't know specifically what maintenance on a 575 will run the first few years, but I don't think 20% is an unreasonable expectation.

If you consider the HELOC scenario, don't go specifically with a line of credit or interest only option. If your livelihood is secure and your income consistent (i.e salaried versus based on sales), target a payment (P+I) you can easily afford to make over 8-10 years, but where you're paying down the principal fast enough where you won't be upside down in the car for long. That way if your situation changes (job, baby, marriage, bigger house) you can liquidate the car and pay off the financing.

Good luck,
Phil

 

To complement Phil's suggestion, if you go with a home equity, make sure you know in advance when you have to bring the outstanding balance to zero. Banks require the borrower to payoff the home equity within a certain period of time notwithstanding that the amortization period of the home equity loan may be as long as 20 years.