Advised to Sell Car and put off Mortgage

M

Mixednuts

Registered User
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Hi,
I am in a bit of a pickle at the moment and need to take a big slice off my mortgage , I was telling a guy and his advice was for me to sell my 07 Hyundai Santa Fe and put the 35k approx straight off my mortgage (stay with me I know this is not the mortgage forum)....

.....heres the thing ,I told him I need the car , he told me then to get the same vehicle out on a lease agreement , essentially pay money each month but never own it ?
Give it back whenever you want etc etc .

Now I have never heard of any arrangment like this but it would suit me !

Anyone got any pointers or insight .

Ta
L.
 
Re: Advised to Sell Car and put off Mortgage ???

This type of leasing (operating lease) is common enough in the course of business, but I didn't think it was that prevalent among private individuals.

Lease hire/hire purchase is a slightly different animal where you will own the car at the end of the agreement, and you do not have the right to give back the goods at any time.

I am a little confused however-you will still have a fixed amount to pay per month on both your mortgage and your car.

Do you currently own the 2007 Santa Fe outright-i.e. did you pay cash?
What 'guy' has this advice for you?
If you are in difficulty meeting your mortgage payments, will the same apply with lease payments?


Another solution is to sell your 2007 Santa Fe and buy an older cheaper vehicle with the proceeds, and then use the balance to pay down your mortgage.
 
Off topic posts removed. Stick to the topic in hand and keep the rants in Letting Off Steam.
 
I agree with CCOVICH, if you own the car you can sell it buy a cheaper car and use the balance to reduce your mortgage.

Alternatives are if it's not your home to sell the property, or if it's just a short term cash flow problem to ask your bank for a moratorium on payments for say 6 months. Without more details it's hard to advise.
 
Mixednuts said:
Hi,
I am in a bit of a pickle at the moment and need to take a big slice off my mortgage , I was telling a guy and his advice was for me to sell my 07 Hyundai Santa Fe and put the 35k approx straight off my mortgage (stay with me I know this is not the mortgage forum)....

.....heres the thing ,I told him I need the car , he told me then to get the same vehicle out on a lease agreement , essentially pay money each month but never own it ?
Give it back whenever you want etc etc .
Click to expand...

As CCOVICH said operating leases or contract hire is common for business but something similar can be done on a private basis. [broken link removed] offers such a contract but with such plans you can't give back the car "whenever you want", the contract would be typically 36 months, 48 months or 60 months and AFAIK there would be a limit as to the number of inclusive kilometres over the time period of the lease after which you would be charged more.
 
In my experience a Private 'Lease' is in fact a long-term loan. E.g. a 5 year lease is the eqivalent to a 7 year loan that allows you to clear the balance at year 5. If you try to pay it off before this they hit you with a penalty - normally 3 months interest.
They don't care about the value of your vehicle as you are responsible for the full loan value at all times.
I would not advise this course of action - usual story, if it seems too good to be true etc...
 
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