Re: GLX For Sale:

[Khan Klatt <khan@mediaaccess.com>]

At 9:32 AM -0500 03/09/2000, Kenny Hofmann wrote:
>Fellow GLX Owners,
>
>A truly sad day is upon me. I have decided to part with my Jetta in
>order to pursue home ownership. Seems that the bank wants my income to
>debt ratio way down. I am not gone for good, as I will be promptly
>shopping for an A4 as soon as I have a garage to keep it in. If you know
>anyone in the market, please pass this along to them.
>
>1998 Jetta GLX VR6
>-Silver Arrow Metallic
>-22k miles
>-5 speed
>-black leather
>-Bose sound system
>-No Mods
>-All service done
>-10 yr/100k mile warr. negotiable
>-never wrecked, never smoked in
>-Interior like new
>-Exterior with a few door dings( I hate those people)
>- Tinted Windows
>-Splash Guards and Nose Bra(VW)


Kenny-

I suggest going out and refinancing your car. You can reduce your 
debt/income ratio by reducing your monthly payment on your car.

Assuming you got a 5 year loan in 1998, that means you have three 
years left in the financing.

So go out, find a new car loan for another 5 year period. You car is 
probably worth about $18,000, financed (at around 7.5%) over five 
years means a monthly payment of $361. If you financed $22,000 
originally, that brings your payments down from about $440, or a 
reduction of $80/month.

Some car loans will allow you to finance for even six or more years, 
reducing your monthly payment down to $311.

Let me be really clear: I am *NOT* suggesting you actually pay off 
your car over five or six years. Instead, you just get a loan that 
doesn't penalize you for paying early. By reducing what the bank 
expects you to pay by refinancing, you reduce your debt/income ratio.

Further, you don't end up paying more in interest because you're 
still paying your original payment (assuming you can still afford it 
after your house payments kick in), and because there is no penalty 
for your new car loan, there's no down side, and you don't lose what 
little equity you've built in your car so far. (yeah, cars are a 
horrible investment).

So, keep the car, just reduce your payments, which is all the 
debt/income ratio cares about. If you are able, keep making the 
payments you're making today. If not, you can make the lower 
payments, and just pay more in interest.

Bottom line is, if they're going to equate your earning/paying power 
to a formula, there are things you can do to screw with the 
weaknesses in that formula.

-Khan


Khan Klatt                                         khan@mediaaccess.com

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