Saturday, 20. November 2010
Why? We had a terrible tax lien that had to be paid. After that loan, we cleared all our credit cards, and use STRICTLY cash. The only thing we have is our mortgage and car loan (which will be paid in less than 12 months). We are current on our payments.
We only refinanced enough to pay off all our credit cards, our 1st mortgage and update our kitchen. Hence, we have over 50% equity in our home. We are current with all our bills.
So…is there hope for us to negotiate a more reasonable interest rate, or do we fall through the cracks, in that we pay our bills on time – barely. And it’s killing us as far as saving for retirement (which is about 7 years away).
We plan to sell our home in 7 years (+/-). Our home appraised in June of 2007 at 6,000 (before remodeling). Our new mortgage is at 8,800 now. We totally remodeled the 12 x 24 kitchen.
…And remodeled master bath and family room…
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Friday, 19. November 2010
This is good practice for all of you budding financial advisors out there. My husband and I have 3 long-term debts: my Federal student loan which is only in my name, a car loan on which we have about 3 more years of payments left, and a year-old mortgage. The latter two are in both our names. We have no credit card debt and are DINKs. The interest rates/balances on the debts are: student loan 3%/ ,000, car loan 6.99%/ about 9,000, and mortgage 7%/ about 197,000 (yes, I believe as first-time home buyers we got screwed on that interest rate at closing, but that’s water over the dam now). We have about 12,000 in savings, and we have a little over 20,000 equity in our house. Here’s the tricky part: this year, due to a layoff, our gross annual combined income was reduced from over 60,000/year to about 40,000 and we have applied for mortgage rate modification because of course at the moment we can’t qualify for traditional refinancing.
I know that it is generally best to repay the loan that has the highest interest rate first, but in our case I’m also taking into consideration that my husband needs to build up a credit history here in the U.S. (he’s from Europe and immigrated 4 years ago), and the only loan that we can pay off at the moment is the student loan. The student loan has the lowest balance and I’ve been carrying it the longest (11 years). I am inspired by the low balance on my student loan and the historically low interest rate and am tired of the student loan debt, so I’m tempted to pay it off right away. My husband and father suggest not paying it off now, because 1. we need as much as possible in our savings account for a sense of security and 2. we are more likely to be approved for our mortgage rate modification if we show as much debt as possible.
What do you recommend?
Thank you all so much for your input- I’ll just continue to make regular payments on the student loan and my husband will be delighted to know that he is right;)
A couple of things I should clarify though:
Mytakeonit- in a financial emergency, we would get help from my dad, so, although I would be hesitant to use a lot of our savings, we would have a backup plan. So everyone is probably wondering that if it’s so easy why not just have daddy pay off the loans? And the answer is because we have an agreement that he will help in a crisis caused by things beyond our control, but we want to try to handle things on our own if at all possible.
tiffgrif- I know what you mean, but I should mention that our car is a Subaru Forester, which really don’t depreciate very much..which is one of the reasons why we chose that make.
Thanks again!!
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Saturday, 30. October 2010
We make over 80,000 a year and we have a bad credit rating because of a health issue and some not so smart choices. We are trying to get a loan to pay off everything on our credit (less than 7000.00) not counting our car loan (up in FEB 07) and our house (we owe110,000 and it is worth 135,000, but can’t get a home equity loan in TX b/c of the refiance only 80% law.) We can afford a payment of up to 475.00 a month. I have a listing on Prosper, but I only have a few bids right now. The listing is under gandbcole if you want to find out a little more about us. I just need to know where to find a private investor that wants to carry a loan for 2 yrs at a 28.75% rate. I do not mind paying the high interest if I can get rid of all the old on my credit and only have good stuff showing to improve it. What should I do? I would even sign a personal guarantee putting up the equity on my home for collateral. Just do not know where to look.
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Saturday, 16. October 2010
We make over 80,000 a year and we have a bad credit rating because of a health issue and some not so smart choices. We are trying to get a loan to pay off everything on our credit (less than 7000.00) not counting our car loan (up in FEB 07) and our house (we owe110,000 and it is worth 135,000, but can’t get a home equity loan in TX b/c of the refiance only 80% law.) We can afford a payment of up to 475.00 a month. I have a listing on Prosper, but I only have a few bids right now. The listing is under gandbcole if you want to find out a little more about us. I just need to know where to find a private investor that wants to carry a loan for 2 yrs at a 28.75% rate. I do not mind paying the high interest if I can get rid of all the old on my credit and only have good stuff showing to improve it. What should I do? I would even sign a personal guarantee putting up the equity on my home for collateral. Just do not know where to look.
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Thursday, 23. September 2010
I’m thinking about paying off our car with our home equity line of credit. It has a lower rate than the car loan ( i know, i don’t have the best credit). We’re not looking at moving soon, if ever.
And what’s really making me think about it is the fact that when i send in an extra payment on the car, they take interest out of the dang thing. So i can’t seem to pay it down quicker! But when i sent in extra payments on our equity line it went straight to principal. And we actually payed off about half the amount of the car in a year.
Anyone out there done this? Anyone work in the field and have feedback? Any other feedback? 
I’m thinking about still making my regular car payment amount…… plus extra. So even though it’s over 20 years, I’ll pay it as if it’s on a 5 year schedule.
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Tuesday, 21. September 2010
I owe 37k on a home equity line of credit, and another 22k on a car loan. The interest rates on those loans arent that bad (7% and 8%) but I am paying a lot in interest every month. I have been putting the max (15%) of my paycheck into 401k. Does it make sense to reduce my 401k contribution to 1% (so I get the company match) so I can pay off loans faster?
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Friday, 3. September 2010
I own a home and want some extra money.I have about 200,000 equity on my home and my loan is for a 100,000.My credit is not the best in the world.I have 2 credit cards total of 1,700 dollars and owe a few doctor bills totaling 730 dollars.My house payments are current and I have no car loan.My salary just barely pays my bills.Maybe I can leave some money in a high interest account to acquire some money from the equity loan too and use some of the money to do a few things to house but not major remodeling just new carpet,paint landscaping etc etc.What is the best way to get some extra cash,I am a single mom and only have my one income coing in and can’t take another job because I have to take care of my other responsiblities as a mom.Please no loan companies respond. Just want to make my quaility of life a little better.Thanks anyone.
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Friday, 13. August 2010
After a month of searching, I found 2 trucks that I was interested in buying. Called the first place, and they sold it just the day before. Called the second place, and they sold it just moments before. I decided to look locally and found a truck on craisglist in a nearby neighborhood by a private seller. It is a steal of a deal!!! I’m afraid they will sell it before I get a car loan from my credit union. I was wondering, can I take the money out of my home equity, then use the car loan from the credit union to pay that off since it’s a much better interest rate?? Just a thought to get things moving quicker. Thanks!
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