Car Refinance?

I applied and approved for a car refinance loan with Wells Fargo. My question is, I owe $26,000 for my car but the blue book value is only $17,500. Will I have to pay the difference between what I owe and what the car if valued at? I can't call Wells Fargo's customer service because their offices are closed.

Usually, the bank will not lend that big of an advance on a car. They typically want to stay at 100% of the car's value. If you have gold balls credit, they will extend an over-advance. Most overadvances are in teh 110% range, some go as high as 125%. You are looking for a 148% advance. That is a very hard loan to get.

Right now, banks are very tight on their loans. As you know, people are foreclosing and defaulting like never before. So, they are more conservative in their lending.

I would expect them to come back and tell you they would loan about $20,000 tops on this car. Then the otehr $6000 is on you to pay some way. If you cannot pay the $6k, then they will not be able to refi the car.

If Wells Fargo approved your refinance already, then your balance with them will be the amount of your other loan. The take over the entire loan, not just what the car is worth. Your rate probably wasn't best with that high of an LTV (loan to value), but it's a moot point since you've already gotten the refinance. If you are happy with the terms of the deal (months and interest rate), then no worries. You shouldn't have to pay any $ up front.

They should pay off the loan with your original lienholder and then you'd owe Wells Fargo that amount.