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ZenNUTS said:   with Amazon Prime day coming, what's the ThankYouPoint to Amazon conversion rate? I can't find it anywhere.
  
0.8¢ per http://www.valuepenguin.com/citi-thankyou-points
 

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I tried the mortgage thread but didn't get any responses. So here is my question again.

I currently have a 10yr balloon with a local credit union for $105,000 at 4% (3.5% with interest rebate)with 7 years remaining until the balloon. I am interested in refinancing to lower the rate/payment and get into a 30 year fixed. We plan on being in the house another 2 years and then renting when we move to another section of town(separate, but related issue). Current payment is $616/month of which about $360 is interest. LTV is roughly 75%.

There are several reasons I am hesitant to refinance at this point, but I wanted to get other's take on the issue to see if I am looking at it the right way.

1. Credit union no longer offers the 10 year balloon and therefore, I can't make adjustments on it to lower my rate like I have done in the past for a flat fee of $400 which would also extend the 10 yrs (but not re-amortize the loan).
2. The credit union charges lots of fees including a steep origination charge so they are no good for the refinance
3. I have been getting substantial return on the interest paid since members have been getting dividend returns from the credit union. The returns in the past have made the actual interest paid on the loan come to about 3.5%. This is not guaranteed, but it has happened the last 8 years.
4. Since the loan is small, I can't seem get a true no-cost until I am around 3.875% and at 3.750% it is estimated I would have to pay about $200 for that rate.

Would you all refinance in this situation or just keep with the cheaper 10yr balloon until I am forced to deal with it 7 years from now?

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hairybeast said:   I tried the mortgage thread but didn't get any responses. So here is my question again.

I currently have a 10yr balloon with a local credit union for $105,000 at 4% (3.5% with interest rebate)with 7 years remaining until the balloon. I am interested in refinancing to lower the rate/payment and get into a 30 year fixed. We plan on being in the house another 2 years and then renting when we move to another section of town(separate, but related issue). Current payment is $616/month of which about $360 is interest. LTV is roughly 75%.

There are several reasons I am hesitant to refinance at this point, but I wanted to get other's take on the issue to see if I am looking at it the right way.

1. Credit union no longer offers the 10 year balloon and therefore, I can't make adjustments on it to lower my rate like I have done in the past for a flat fee of $400 which would also extend the 10 yrs (but not re-amortize the loan).
2. The credit union charges lots of fees including a steep origination charge so they are no good for the refinance
3. I have been getting substantial return on the interest paid since members have been getting dividend returns from the credit union. The returns in the past have made the actual interest paid on the loan come to about 3.5%. This is not guaranteed, but it has happened the last 8 years.
4. Since the loan is small, I can't seem get a true no-cost until I am around 3.875% and at 3.750% it is estimated I would have to pay about $200 for that rate.

Would you all refinance in this situation or just keep with the cheaper 10yr balloon until I am forced to deal with it 7 years from now?

Have you looked at a PenFed 5/5 ARM?

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Hi fw.....I am trying to buy a house. I have a credit score of 775+, no credit card debt, steady job (4.5 yrs, 57K/annually), single household no dependents.....and a substantial amount of student loan debt. Here are my current loans and terms, snapshot style:

 
Loan Balance Interest Rate Principal Interest Pmt Payments Remaining
A 16,289 5.75% 145 79 224 90
B 14,527 3.75% 59 46 104 186
C 10,842 10.25% 29 106 135 186
D 13,425 4.25% 26 72 98 186
E 37,603 6.38% 60 203 257 160
Total 92,686   319 506 818  


My assets include 5K in a savings account, paid off car (roughly 5K in value), and 18K in a 401K.  

The end goal is to buy multi unit house to create an income generating property.  While I think I can afford the price range I want, the home-buying program won't grant me that due to my DTI. (Off topic: the program is naca and 30yr ~3% fixed)

I am extremely motivated to get this going. Any tips on how I should proceed?

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Welcome to FWF. Nice summary, Randy. These are all student loans? Just checking. No jet skis, etc?

It looks to me like you are a decent credit risk to the FWF crowd but not to Wells Fargo, Chase and Citi. $57K is a fine income, but when coupled to almost $100K in student loan (or other debt), OUCH!

If you are in to math -- and I suspect you are or could be... and into self control and discipline -- which you could be... I'd attack your debt head on with the $11K at 10.25. OUCH! (Sorry to repeat myself). That's a whopping interest rate today. Can you get rid of Netflix, use a prepaid phone, eat rice and beans for a few months and get that one paid down to zero? then knock down the $38K one at least a bit.

I wonder about going to a local credit union -- ask to speak with a banker / someone in loans. Lay all of this out for them, open a checking and savings account and ask them to put you on a path towards a mortgage as soon as they can. Be up front with them that you know you aren't ready for it now, but just what would it take to get a mortgage (I think a multi-family apartment is out of the question for you right now) for a duplex or a single family home as soon as possible. If they give you a plan for "pay down $X and we'll give you a mortgage for $Y", you might just have a path forward. Be sure to get their credit card too. Get a good relationship going with them. Get a $500 CD and a Christmas Club account. Create the image that you are your mother's son or daughter, clean as the fresh fallen snow and as American as apple pie (I mean Apple iPhone).

Something like this might get you a bit ahead of going to a big bank and being denied for DTI.

BTW, the banks could care less about your 401k. They can't dive in to that if you default. It's a big fat zero for them. On the other hand, $18K in your 401 after a few years out of college probably puts you in the top 10%! Keep up the good work!

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Yes these are all student loans. My generation is screwed ..... I mentioned the 401K because I've also debated about taking out money against it towards my downpayment (and therefore smaller mortgage taken out). I guess then I would be mortgaging my future, eh?

I will pursue a credit union / local bank approach and see where that goes. Follow up question, I wouldn't completely drain the savings account (my emergency funds), but would it be smart to drain the savings and pay off the loan? I have a seasonal gig that I could knock out that loan by end of year if I spent my savings on it, and damn that would feel good. Thoughts?

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Whatever you do randy, don't forget to live once in a while.

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randy89921 said:    Follow up question, I wouldn't completely drain the savings account (my emergency funds), but would it be smart to drain the savings and pay off the loan? I have a seasonal gig that I could knock out that loan by end of year if I spent my savings on it, and damn that would feel good. Thoughts?It's good to have emergency savings (at least 3 months of living expenses, 6+ is better). I think if you want to get the property soon, you need to lower your DTI to whatever the program deems acceptable. I'd pay off loan C first, because 10% is ridiculous, then look into consolidating (perhaps A+E and B+D, if possible) and , extending, refinancing the loans, or maybe signing up for income-based repayment. This could lower your monthly payments and therefore your DTI.

Have you been paying down your loans aggressively or something? You've only saved $5K in 4.5 years of working. How do you plan to "afford" a multi-unit house?

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Chase sent me a 2% fee balance transfer check with 0% APR until 11/2017 up to $15k. My private student loan is $21k 3.3% variable. Is it a no brainer to use this to pay 15k of the student loan? I have enough funds to pay it off in full. I have excellent credit, about 120k in credit card limits, no other debt, contribute to retirement accounts, emergency fund, steady job.

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The program allows me to qualify for additional money when purchasing multi-unit properties, the idea being its going to get filled and that money will apply to the mortgage. In fact, should I keep the apartment filled then my net expenses would be cheaper than what I'm doing now. I struggled with credit card debt and worked to get that over with earlier this year. Most of my savings has been done in the last 6 months. 

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Chase Freedom CC 5% cashback categories question:

Does Costco GAS STATION count as wholesale clubs (5%) or just regular gas station (1%) for this quarter?

http://creditcards.chase.com/freedom/calendar 

Thanks!

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matrix5k said:   Chase sent me a 2% fee balance transfer check with 0% APR until 11/2017 up to $15k. My private student loan is $21k 3.3% variable. Is it a no brainer to use this to pay 15k of the student loan? I have enough funds to pay it off in full. I have excellent credit, about 120k in credit card limits, no other debt, contribute to retirement accounts, emergency fund, steady job.
  
I would...  You might lose the student loan interest deduction (I think you can still get it).  Obviously, you need to be disciplined enough to pay it off before the 0% expires.

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LongDongSilver said:   Does Costco GAS STATION count as wholesale clubs (5%) or just regular gas station (1%) for this quarter?

http://creditcards.chase.com/freedom/calendar
 

  
"Does not include gas, fuel, wholesale club specialty service purchases such as travel, insurance, cell phone and home improvement." -http://creditcards.chase.com/freedom/calendar  

You probably already know the solution: buy a Costco cash card in the store or online to use at the pump.

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matrix5k said:   Chase sent me a 2% fee balance transfer check with 0% APR until 11/2017 up to $15k. My private student loan is $21k 3.3% variable. Is it a no brainer to use this to pay 15k of the student loan? I have enough funds to pay it off in full. I have excellent credit, about 120k in credit card limits, no other debt, contribute to retirement accounts, emergency fund, steady job.Not a no-brainer. If your student loan interest is tax-deductible, it's almost a wash -- you're trading 3.3% deductible for ~1.7% (2%/14mo) non-deductible. If you have enough funds to pay it off in full, why pay the 2% fee? Are you getting > 2% return on this money?

Personally I'd try to refi or consolidate the loan to get it into a low fixed rate for as long as possible.

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randy89921 said:   The program allows me to qualify for additional money when purchasing multi-unit properties, the idea being its going to get filled and that money will apply to the mortgage. In fact, should I keep the apartment filled then my net expenses would be cheaper than what I'm doing now. I struggled with credit card debt and worked to get that over with earlier this year. Most of my savings has been done in the last 6 months. What if one or more of the units don't fill quickly? What if there's a plumbing or other maintenance emergency? What if one of the tenants stops paying rent and you need to start the eviction process which could take months? IMO you don't have anywhere near enough cash to survive such situations.

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scripta said:   matrix5k said:   Chase sent me a 2% fee balance transfer check with 0% APR until 11/2017 up to $15k. My private student loan is $21k 3.3% variable. Is it a no brainer to use this to pay 15k of the student loan? I have enough funds to pay it off in full. I have excellent credit, about 120k in credit card limits, no other debt, contribute to retirement accounts, emergency fund, steady job.Not a no-brainer. If your student loan interest is tax-deductible, it's almost a wash -- you're trading 3.3% deductible for ~1.7% (2%/14mo) non-deductible. If you have enough funds to pay it off in full, why pay the 2% fee? Are you getting > 2% return on this money?

Personally I'd try to refi or consolidate the loan to get it into a low fixed rate for as long as possible.


The student loan is already refinanced. They were 6.8% grad loans before I refinanced to 2.9% variable and now it's up to 3.3%. I don't qualify for the student loan deduction. I earn 3% taxable in my rewards checking account.

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matrix5k said:   The student loan is already refinanced. They were 6.8% grad loans before I refinanced to 2.9% variable and now it's up to 3.3%. I don't qualify for the student loan deduction. I earn 3% taxable in my rewards checking account.Then I guess you'll save about $200 with the BT. It'd be better with a 0% $0 BT, if you can find one. Or, since you're gonna pay it off anyway, you could get 3-4 CCs with sign-up bonuses and pay the loan to meet minimum spend.

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scripta said:   matrix5k said:   The student loan is already refinanced. They were 6.8% grad loans before I refinanced to 2.9% variable and now it's up to 3.3%. I don't qualify for the student loan deduction. I earn 3% taxable in my rewards checking account.Then I guess you'll save about $200 with the BT. It'd be better with a 0% $0 BT, if you can find one. Or, since you're gonna pay it off anyway, you could get 3-4 CCs with sign-up bonuses and pay the loan to meet minimum spend.

How do you pay student loan with credit cards?

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plastiq.

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Also, some servicers take credit cards by phone for "extra" payments ie not monthly.

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I just did a post-tax backdoor Roth conversion for 2016 (income exceeds the threshold for pre-tax). I filled out the request form incorrectly, which resulted in 10% Federal withholding when the conversion from the IRA to the Roth occurred. Of the $5,500, only $4,950 was added to my Roth account as a result. The withholding and the conversion are not reversible.

I'm fine settling the $550 at tax time, but can contribute another $550 to my IRA and covert that with 0 withholding to complete my 2016 contribution, or am I out of luck on the $550 remainder?

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otaymiester said:   I just did a post-tax backdoor Roth conversion for 2016 (income exceeds the threshold for pre-tax). I filled out the request form incorrectly, which resulted in 10% Federal withholding when the conversion from the IRA to the Roth occurred. Of the $5,500, only $4,950 was added to my Roth account as a result. The withholding and the conversion are not reversible.

I'm fine settling the $550 at tax time, but can contribute another $550 to my IRA and covert that with 0 withholding to complete my 2016 contribution, or am I out of luck on the $550 remainder?

  Yes you can add $550 to your Roth account. Tell the IRA custodian that this is a rollover of IRA funds so that it is coded properly and not considered as a contribution for 2016.

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fwuser12 said:   
otaymiester said:   I just did a post-tax backdoor Roth conversion for 2016 (income exceeds the threshold for pre-tax). I filled out the request form incorrectly, which resulted in 10% Federal withholding when the conversion from the IRA to the Roth occurred. Of the $5,500, only $4,950 was added to my Roth account as a result. The withholding and the conversion are not reversible.

I'm fine settling the $550 at tax time, but can contribute another $550 to my IRA and covert that with 0 withholding to complete my 2016 contribution, or am I out of luck on the $550 remainder?

  Yes you can add $550 to your Roth account. Tell the IRA custodian that this is a rollover of IRA funds so that it is coded properly and not considered as a contribution for 2016.

  Great!  Thank you.

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scripta said:   
matrix5k said:   Chase sent me a 2% fee balance transfer check with 0% APR until 11/2017 up to $15k. My private student loan is $21k 3.3% variable. Is it a no brainer to use this to pay 15k of the student loan? I have enough funds to pay it off in full. I have excellent credit, about 120k in credit card limits, no other debt, contribute to retirement accounts, emergency fund, steady job.
Not a no-brainer. If your student loan interest is tax-deductible, it's almost a wash -- you're trading 3.3% deductible for ~1.7% (2%/14mo) non-deductible. If you have enough funds to pay it off in full, why pay the 2% fee? Are you getting > 2% return on this money?

Personally I'd try to refi or consolidate the loan to get it into a low fixed rate for as long as possible.

  Technically, if OP segregates his/her student loan debt on the CC it would also be deductible as student loan interest. However, if OP has any other debt and charges on the CC, I don't think OP can deduct the interest.

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