I wouldn't suggest paying off your cars unless you are paying a ridiculous
interest rate. Instead I would suggest you look into investing some of
that equity to start earning you a high rate of return or use your equity
line for a down payment on an investment property. Another option could
be to look into converting your current mortgage into a Retirement Loan. A
Retirement Loan would allow you to cash out money (for either investments
or more property) and still lower your payment. Furthermore, a Retirement
Loan will allow you to allocate a portion of your mortgage towards an
interest earning account so that you can seize the financial opportunities
you never knew existed with your current mortgage program.

The main warning in this circumstance is called the "institutionalizing
of debt",
in that you are transferring short-term debt to the possibility of
being long-term.
It is a slippery slope if you were to continue to tap higher-cost debt
that was
freed by this, like buying a new car before the old one's contribution
to your
home-debt was paid off.
However, you seem to have the correct attitude that you should
absolutely
pay off this debt as soon as practical. With that in mind, you will
gain a lower
interest rate cost from an equity loan, and it may be tax advantaged
too.
The last thing you should check is the detail of your car loan. Car
loans
can be structured to pay all interest first, so the benefit of
prepayment may
be different than you expect.
Joe

In article <1109108541.250487.287760[at]z14g2000cwz.googlegroups.com> ,
"osu104" <psu104[at]yahoo.com> wrote:

- quote -

There are several dangers. First, the H/E loan will likely
be an adjustable. Interest is going up, and a terrorist attack
could cause interest to spike, leaving you holding the bag.
Second, paying off bills with a quick fix leaves you with a
false sense of wealth, which causes some people to go out and
run up the bills again. Third, you are putting your family
home at risk for a car. Forth, the car rots away every year,
and will be long gone while you are still paying the loan. It
is never a good idea to convert a short term debt into a long
term debt, nor is it a good idea to risk your house to do so.

- quote -

What kind of emergency are you planning to have that would
cost tens of thousands? Any that I can think of involve the
loss of the house, like wild fire or earthquake, and in that
case, the equity is gone. And if you don't have an emergency
fund, then you have no business buying an ultra-luxury car.
(A Hyundai is transportation, anything more is luxury. A
$20K loan on a car is outlandishly lavish spending.)

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
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osu104 wrote:
- quote -

If you don't make your car loan payments you can easily lose your car.
If you don't make your home equity loan payments you can easily lose
your house. That is the danger. You are getting a lower interest rate
in return for using your home as collateral. I'm not advising for or
against the home equity loan, just cautioning you not to regard the
lower interest rate as a free lunch.

What are the dangers to using a home equity line to pay-off a car loan?
I have 200K+ in equity in my home and am thinking about paying off a
20K automobile loan with the a home equity line.

I would continue to make the same car payment but pay them directly to
the home equity line. This way, I can write off the interest and if I
ever needed the money, could reduce my payments.

The only danger I can see is that if I ever needed to cash out the
equity for an emergency.

Thanks for the advice.