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kvjagan said:   Just for everyone sake... I picked up the car under rent2buy on Friday 4:40pm and took it for inspection. The mechanic told me that the vehicle was involved in a wreck on the passenger side and it was painted there. Further, he said the vehicle has suspension issues and the tires were wearing out unevenly. (All 4 tires looked new though).  I called Hertz at 5:50pm to return the car but they close at 6PM. The agent told me that I can return the next morning at 9am and she will waive the rental fee.
I returned the car at 9am the next morning but the guy at the counter charged me $57(rental for 1 day). I called their customer service and they promised to waive the fee and it is pending approval.
Please note that this car was priced around $1000 less than the others.

Further on Sat I got a call from the Hertz Sales local office. I told him about the wreck and he said he knew about it. I felt bad that he did not reveal this when I was picking up the vehicle. He further said that I should not get discouraged by one car. He advised me to look at certified pre-owned car as they undergo a vigorous 70 point check unlike rent2buy and he added that delaers also buy cpo, add 2-3k and sell them. 
At this moment I decided not to look at other hertz cars as I  expect prices on 2016 cars to come down after a few months.
 

  Thanks for the update.
Good call on deciding not to buy. Based on the mechanic's input (suspension issues and the tires were wearing out unevenly), being marked 1k down is not sufficient compensation IMO.

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10K posts in this thread. Amazing job FWF!

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is there any checking/savings account with sign on bonus and interest rate above 1% ?

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My question relates to reasons why you should NOT put 20% down on a house, even though putting less means a higher monthly payment.  Let's say a house is $200,000.  20% down is $40,000 out of pocket.  This is money that can't be invested elsewhere.  5% down is just $10,000, leaving you with $30,000 to invest elsewhere but now the loan is subject to PMI.  With an interest rate for a 30 year mortgage at 3.5% and disregarding taxes and insurance, the monthly payment for the 20% down loan is $718/mo and the 5% down loan is $972 including the added PMI.  Now, this is an additional monthly cost of $254, or $3,048 annually.  Since you have $30,000 left over in the bank after closing with the 5% down loan, now you can pay the added $3048 annually out of the $30,000 in the bank for nearly the next 10 years.  On a typical 30 year loan, the PMI will automatically drop off around the 10 year mark anyway, correct?  And that doesn't even begin to consider the rate of return you could expect to gain on the $30,000 when invested elsewhere.  This also doesn't take into consideration any potential value appreciation of the house.  If the house appreciates by 5% over a few years, that's a $10,000 total gain on your initial investment of just $10,000 down, or a 100% return.  Whereas, if you put $40,000 down, the 5% appreciation in your house is only a 25% gain.  In addition...I don't know about you, but I would much rather have that additional $30,000 cushion in the bank in case of emergency, job loss, etc than have it stuck sitting as equity in my house.  Does my logic make sense?  Any suggestions others might add to this topic?  

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nbruesch said:   My question relates to reasons why you should NOT put 20% down on a house, even though putting less means a higher monthly payment.  Let's say a house is $200,000.  20% down is $40,000 out of pocket.  This is money that can't be invested elsewhere.  5% down is just $10,000, leaving you with $30,000 to invest elsewhere but now the loan is subject to PMI.  With an interest rate for a 30 year mortgage at 3.5% and disregarding taxes and insurance, the monthly payment for the 20% down loan is $718/mo and the 5% down loan is $972 including the added PMI.  Now, this is an additional monthly cost of $254, or $3,048 annually.  Since you have $30,000 left over in the bank after closing with the 5% down loan, now you can pay the added $3048 annually out of the $30,000 in the bank for nearly the next 10 years.  On a typical 30 year loan, the PMI will automatically drop off around the 10 year mark anyway, correct?  And that doesn't even begin to consider the rate of return you could expect to gain on the $30,000 when invested elsewhere.  This also doesn't take into consideration any potential value appreciation of the house.  If the house appreciates by 5% over a few years, that's a $10,000 total gain on your initial investment of just $10,000 down, or a 100% return.  Whereas, if you put $40,000 down, the 5% appreciation in your house is only a 25% gain.  In addition...I don't know about you, but I would much rather have that additional $30,000 cushion in the bank in case of emergency, job loss, etc than have it stuck sitting as equity in my house.  Does my logic make sense?  Any suggestions others might add to this topic?  
 

  >>>...leaving you with $30,000 to invest elsewhere
at this point, you own that money

>>>...Since you have $30,000 left over in the bank after closing with the 5% down loan, now you can pay the added $3048 annually out of the $30,000 in the bank for nearly the next 10 years
now you're giving that money to the bank; it's no longer yours.  Also it's ten years into a 30 year loan.  Your "extra" 30 grand is gone but you're still on the hook for the next 20 years.  If you sell the house at this time, then you would have allocate more to loan repayment and less to money in your pocket.

>>>... This also doesn't take into consideration any potential value appreciation of the house.
You shouldn't be considering that, because it is independent of how much you put down.  If the house appreciates, it appreciates the same whether you owe 80% or you owe 95%.  Likewise, if the house value goes down, it will go down by the same amount no matter how much you borrowed to get to that point.

>>>...I would much rather have that additional $30,000 cushion in the bank in case of emergency, job loss, etc
Yes, that is a valid concern.  In exchange for that flexibility, you would be paying more money in interest (and insurance) over the lifetime of the loan agreement.

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Hi naas. Thank you so much for your reply. I would love to discuss this further with you.

If mortgage money is 3.5% and inflation is approximately 2%, that's an effective rate of just 1.5%. I'm pretty sure even the 'simplest' investor could stash away that $30,000 and earn a better return than that. Moreover, the faster you pay off your mortgage, the less money you have available to invest in other assets. In other words, if you think of your home as a 'savings account', the more you pay off your loan equates to money that could be saved or invested elsewhere. This money is now tied up in your house and is subject to the menial appreciation or potential depreciation of the house itself.

Also, the $30,000 you 'gave to the bank' over the 10 year term in this hypothetical example doesn't actually correlate to the same $30,000 after 10 years. Your balance on the 20% down loan after 10 years would be $123,526 and the balance on the 95% loan would be $146,687 which is only a $23,161 difference. I realize I am introducing a number of new variables here but I still don't see how the larger down payment is better for someone who can control their own spending and has the appropriate cash flow to handle the higher monthly payments over the years. Yes, it's better for people who spend their money immediately as they earn it but I would presume than anyone who can save 20% for a down payment would be dedicated enough to be able to control their spending when they have the extra 15% in the bank.

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nbruesch said:   My question relates to reasons why you should NOT put 20% down on a house, even though putting less means a higher monthly payment.  Let's say a house is $200,000.  20% down is $40,000 out of pocket.  This is money that can't be invested elsewhere.  5% down is just $10,000, leaving you with $30,000 to invest elsewhere but now the loan is subject to PMI.  With an interest rate for a 30 year mortgage at 3.5% and disregarding taxes and insurance, the monthly payment for the 20% down loan is $718/mo and the 5% down loan is $972 including the added PMI.  Now, this is an additional monthly cost of $254, or $3,048 annually.  Since you have $30,000 left over in the bank after closing with the 5% down loan, now you can pay the added $3048 annually out of the $30,000 in the bank for nearly the next 10 years.  On a typical 30 year loan, the PMI will automatically drop off around the 10 year mark anyway, correct?  And that doesn't even begin to consider the rate of return you could expect to gain on the $30,000 when invested elsewhere.  This also doesn't take into consideration any potential value appreciation of the house.  If the house appreciates by 5% over a few years, that's a $10,000 total gain on your initial investment of just $10,000 down, or a 100% return.  Whereas, if you put $40,000 down, the 5% appreciation in your house is only a 25% gain.  In addition...I don't know about you, but I would much rather have that additional $30,000 cushion in the bank in case of emergency, job loss, etc than have it stuck sitting as equity in my house.  Does my logic make sense?  Any suggestions others might add to this topic?  
  
Were you actually quoted 3.5% with either 20% down or 5% down? Usually the rate would be higher with 5% down in addition to the PMI, which makes it much worse since you're paying the extra interest on the entire $190,000, not just the $30,000. If that's not the case, then you're just paying PMI to borrow the extra $30,000. So how much does that cost?

Based on the numbers you provided, the PMI would be $119 per month, or $1,428 per year, or 4.76% of $30,000. In addition to the 3.5% you're actually paying in interest, that makes the cost of the $30,000 8.26%. Now's a good time to ask: do you want to borrow $30,000 at 8.26%? But wait...there's more. The $119 is constant, but the (additional $30,000) balance is decreasing each month as you make a payment. So each month you have PMI, your effective interest rate goes up. I took the liberty of creating an amortization schedule and calculating the APR on the additional $30,000 until the PMI drops off (90 months), which would be 8.55%. So that would be your cost if you kept the loan through 90 months, the PMI dropped off at 90 months, and you always made minimum payments.

PMI will usually terminate when the loan reaches either 80% or 78% of the original value, which would be after 90 or 100 payments in this scenario. You may be able to request it sooner based on current values and your agreement with the lender.

Appreciation is basically irrelevant here. We're just looking at the relative cost of the additional $30,000.

However, regarding the rate of return on your cash investment, that's more of something you would consider on investment properties. If this is your primary residence, it mainly comes down to do you want $30k at 8.5%? On an investment property that might make sense. In your example, both the 25% and 100% return on investment beat 8.5%, so it checks out there. It would also possibly allow an investor to invest in 4 times as many properties, getting the 100% return on the entire $40k in your example. But on your primary residence, you still need a place to live. So you may have a paper gain of 25%/100% in your two cases, but that's all it is at that point.

Your last point of the cash cushion is valid. And again it comes down to, do you want a cash cushion at 8.5%? That's a fairly expensive emergency fund (IMO) for a what-if. But that depends on your overal financial picture and your own risk tolerance.

Cheers and good luck.

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nbruesch said:   If mortgage money is 3.5% and inflation is approximately 2%, that's an effective rate of just 1.5%. I'm pretty sure even the 'simplest' investor could stash away that $30,000 and earn a better return than that. Moreover, the faster you pay off your mortgage, the less money you have available to invest in other assets. In other words, if you think of your home as a 'savings account', the more you pay off your loan equates to money that could be saved or invested elsewhere. This money is now tied up in your house and is subject to the menial appreciation or potential depreciation of the house itself.
  
Be careful. The inflation affects your other investment as well, so you still need to beat the 3.5% you are paying. I don't disagree that 3.5% even is pretty cheap for a 30 year term. But again, for the additional $30,000, you have to beat 8.5%, not 3.5%. I'm not really sure where you're going with the rest of this quote, but since you're saying the principal you've paid down on your house is tied up in the house, let's look at it this way: one way to get that money back out would be a home equity loan. So, if you've paid down, say, $30,000 that is not tied up in your home, would you be willing to take it out in a home equity loan at 8.5%?
nbruesch said:   Also, the $30,000 you 'gave to the bank' over the 10 year term in this hypothetical example doesn't actually correlate to the same $30,000 after 10 years. Your balance on the 20% down loan after 10 years would be $123,526 and the balance on the 95% loan would be $146,687 which is only a $23,161 difference. I realize I am introducing a number of new variables here but I still don't see how the larger down payment is better for someone who can control their own spending and has the appropriate cash flow to handle the higher monthly payments over the years. Yes, it's better for people who spend their money immediately as they earn it but I would presume than anyone who can save 20% for a down payment would be dedicated enough to be able to control their spending when they have the extra 15% in the bank.
  
So the additional $30,000 you paid only reduced the excess balance by about $6,839. I don't have to do the math, but I can tell you that's about 8% annualized. It all goes back to the initial effective rate of the PMI. Unless of course, as I mentioned in my last reply, you actually also have a higher interest rate on the whole balance if you only put 5% down. Then it gets way worse.

I hope I've helped and let us know if you have any other questions. I'd also like to add that I think my posts probably have the tone that you should definitely not do this. And I don't think that's necessarily the case. I just wanted to point out the actual cost of the additional money to you. Whether you think it's a good idea is pretty much up to you.

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nbruesch said:   This money is now tied up in your house and is subject to the menial appreciation or potential depreciation of the house itself.
 

No, it's not tied at all to the appreciation of the house.  It's tied to the interest rate on the loan.  Whatever rate you owe on the loan, you owe even if the house is beamed up by aliens.

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Best Bank Account Bonuses For September, 2016
sappu said:   is there any checking/savings account with sign on bonus and interest rate above 1% ?
  

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naas said:   
nbruesch said:   ............. have that additional $30,000 cushion in the bank in case of emergency, job loss, etc than have it stuck sitting as equity in my house.  Does my logic make sense?  Any suggestions others might add to this topic?  
 

  ...............

>>>...I would much rather have that additional $30,000 cushion in the bank in case of emergency, job loss, etc
Yes, that is a valid concern.  In exchange for that flexibility, you would be paying more money in interest (and insurance) over the lifetime of the loan agreement.
 



 I would also keep the cash myself rather than putting it down on the house. I'd rather pay for the assurance that I have some extra cash on hand. I don't think paying an extra 250+ a month on a mortgage justifies putting all of your cash in one house. I am faced with the same situation and I've debated that a lot with myself and my family and that's my conclusion: having cash on hand is always good. I can pay it down a year down the road, three years down when I have more cash on hand.


 

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Residence: San Jose, CA
W2 Income: $215,000/year
Debt: None

I was talking to a CPA, and he stated that if my income exceeds $100,000, then all passive rentals have zero affect on my tax returns and will simply carry over Passive Activity Loss ATG. Is this correct?


I am currently waiting on the market to cool off and will buy something by December or early Q1 2017. Possibly up to a 4 plex using my VA loan. Does this also apply to primary residence where tax deductions I have with a primary residence won't apply?


I am concerned about opportunity cost, and what it would cost me if I end up maxing out my 457 and 403b ($36,000). I am at a bit of a crossroads, and would like some advice on what to do at this point. Should I max out on the 457 and 403b?


I also have a Thrift Savings Plan through the military and was told I can put $18,000/year, BUT cannot contribute to it if I max out both 457 and 403b accounts. Is this correct?

So these are basically a summary of my questions:

1. Should I max out my retirement accounts 403b, 457, and TSP?
2. Should I put in the minimum into my accounts for the match (403b matches ONLY 1.5% which is what I am doing right now)?
3. Or what combination should my approach be if I should do neither?
4. What are your other thoughts for me on reducing taxes?
5. I have plans on going back into the Army Reserves and my job in the Reserves will pay me a $75,000 bonus over 3 years ($25,000/year). Half of that will go to taxes. Should I put the full amount into the TSP if I don't max out the 403b and 457?

Looking forward to hearing people's thoughts.

Thanks,

Wai

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nbk942m006 said:   Residence: San Jose, CA
W2 Income: $215,000/year
Debt: None

I was talking to a CPA, and he stated that if my income exceeds $100,000, then all passive rentals have zero affect on my tax returns and will simply carry over Passive Activity Loss ATG. Is this correct?
I am currently waiting on the market to cool off and will buy something by December or early Q1 2017. Possibly up to a 4 plex using my VA loan. Does this also apply to primary residence where tax deductions I have with a primary residence won't apply?

 

  

Yes for rentals passive losses are phased out starting at $100k.    Above $150k your passive losses can't reduce your income.   However note that this is just for losses on the rentals.   You can still deduct expenses for rentals from rent income and if your rent income is more than the expenses and depreciation then you have taxable income so the passive loss rules don't matter.   And you can carry forward the losses even if your income exceeds the limits.    Usually rentlals are (should be) cash flow positive but the depreciation (which isn't an out of pocket cost) might make you negative tax wise.      

Tax deductions for a primary residence aren't impacted by the passive income loss rule.  

Your other questions are generally asking if you should max your retirement savings contributions.   You probably should.  You're in a high tax bracket and saving in retirement reduces your tax bill.   
 

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I'm trying to re-establish my credit. I just got a used car loan and a couple of credit cards. The car loan is a 14.9% simple interest loan with no pre-payment penalty.
I can and would like to pay this off very early but I want the loan to be active for the full 3 years as it will hurt my score when it is paid off.
If I make a one time large payment (say 95% of the principal) but do not have them put it towards the principal what will happen when the payment is less than the normal monthly payment?
With it being a simple interest loan I should negate the large interest rate but could I then simply pay the remaining 5% over the course of the 3 years even though the payments will be far less then the normal monthly payment? Will the lower payment negatively affect the credit bureau reporting?

Brian

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I'm not sure why you would want to end the loan three years from now. Having the loan and paying it off early should HELP your credit score, not hurt it.

If it were me, I'd pay down the loan substantially using a principal only payment. That stops the bleeding on the high interest rate. Say your loan is $10,000 with $400 per month payments (I'm making these numbers up). Pay down $8,500 and you saved yourself a bucket of interest. Your loan will now close out in about four months. (Most loans require you to keep making the original monthly payment amount, so your monthly payment will still be $400 per month, only now almost all of it will go to principal and very little will go to interest, since your principal is now so small -- $1,500 and dropping)

The reason I'd stretch it out for at least a few months (rather than paying it off entirely) is that if human eyes see the loan later when you are trying to get some other banking product, you would TOTALLY look like a deadbeat (this is a positive thing on FWF -- you are screwing the bank out of the interest they were planning on receiving.)

By at least stretching it out a few months, you would look a bit better to a human in the future. This is probably of very limited importance, but for the sake of a few bucks of interest, that's what I would do.

Your loan will stay on your credit report for quite a while as "paid as agreed" or something similar. This is how your early-paid-off loan helps you long after the loan is paid off.

Great job getting yourself back in good shape credit wise and managing your financial life. And... welcome to FWF!

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From everything I've read when you only have a couple of open accounts it hurts to close any of them. Also, since the 2 credit cards and this auto loan are my only open accounts, closing the auto loan would leave me with just 2 revolving accounts and no Installment credit. credit scores suffer (10% of score) when there is only one type (Revolving/Installment) open.
Plus I've read numerous forum posts about how paid off auto loans severely diminished their FICO scores right after they closed.
I don't want to open anything else either because I don't want any inquiries to hurt me as well.

If I put the large payment towards future payments shouldn't I still negate most of the interest since it is a simple interest loan?
The original loan is 8K. If I leave 5% ($400.00) and make 36 payments of $13.86 per month I would only pay about $100.00 in total interest.
From what I understand, the lenders only send the bureaus when and if payments are made and not the actual amount paid so I'd get the benefit of longer payment history.

So if I am right in my assumptions I'd be able to:
1. keep this account open to help with mixed types of credit.
2. Negate almost all of the high interest rate.
3. Increase my score monthly for a longer period of time by making 36 monthly payments instead of 4-6.
4. Have this account help my score for a longer period overall.
5. Having an 8K open account with > 95% of it paid off but still be open has to be better for scoring than a closed paid off account.

Is there a glaring hole in my assumptions that I am getting wrong?
I don't mind putting down that much money as it will at least help with the interest but I need to look at the bigger picture as well.
I plan on trying to increase my score to re-finance my mortgage or buy a new house in about 12-18 months so I want to keep it open at least that long.
Even at 14.99% interest the 8k loan will not cost me more than a higher rate on a new 30 year mortgage.
My current mortgage rate is 6.25% and I definitely would like to get my score up to take advantage of the current low interest rates.

Thanks
Brian

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brianparow said:   From everything I've read when you only have a couple of open accounts it hurts to close any of them. Also, since the 2 credit cards and this auto loan are my only open accounts, closing the auto loan would leave me with just 2 revolving accounts and no Installment credit. credit scores suffer (10% of score) when there is only one type (Revolving/Installment) open.
Plus I've read numerous forum posts about how paid off auto loans severely diminished their FICO scores right after they closed.
I don't want to open anything else either because I don't want any inquiries to hurt me as well.

If I put the large payment towards future payments shouldn't I still negate most of the interest since it is a simple interest loan?
The original loan is 8K. If I leave 5% ($400.00) and make 36 payments of $13.86 per month I would only pay about $100.00 in total interest.
From what I understand, the lenders only send the bureaus when and if payments are made and not the actual amount paid so I'd get the benefit of longer payment history.

So if I am right in my assumptions I'd be able to:
1. keep this account open to help with mixed types of credit.
2. Negate almost all of the high interest rate.
3. Increase my score monthly for a longer period of time by making 36 monthly payments instead of 4-6.
4. Have this account help my score for a longer period overall.
5. Having an 8K open account with > 95% of it paid off but still be open has to be better for scoring than a closed paid off account.

Is there a glaring hole in my assumptions that I am getting wrong?
I don't mind putting down that much money as it will at least help with the interest but I need to look at the bigger picture as well.
I plan on trying to increase my score to re-finance my mortgage or buy a new house in about 12-18 months so I want to keep it open at least that long.
Even at 14.99% interest the 8k loan will not cost me more than a higher rate on a new 30 year mortgage.
My current mortgage rate is 6.25% and I definitely would like to get my score up to take advantage of the current low interest rates.

Thanks
Brian

You may not have a choice as to how many payments you make or the payment amount. Most likely you'll be on the hook for the same monthly payment as before, but you loan period will shorten considerably (as debentureboy pointed out). You have to look at you loan docs to see if this is true for this loan.

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If they allow the smaller payments as long as I am ahead of schedule and they do not apply the large payment to principal then does it make sense?

I will look through the loan docs and also try to get an answer in email from the lender...
Thank You for all the advise.

Brian

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You won't get the reduction in interest paid if you simply prepay your loan without it going to the principal. Some institutions allow this, some don't. So if you are interested in decreasing your total interest paid on the loan, you need to pay down the principal.

I'd be surprised if your bank would allow you to negotiate the payment (as in reduce the payment). I've not heard of that before.

I'm not an expert at the dark underbelly side of credit (as in how to best get yourself from bad to not as bad... not as bad to better... etc). That said, I can't imagine that paying $6,500 (or whatever) on your car loan and then paying the rest off over the next few months will damage anything.

With a new house loan in 12 to 18 months, I'd be fine getting other credit also. I'd do it sooner, not later. Maybe let your big car payment post and get reported to the credit agencies (can be a month), then open a few credit cards or personal line of credit. Then cool it until it is refi time. Be sure to use the credit, let it report and then pay off immediately.

What I've listed above I'm pretty sure will be fine and very much not bad. Is there some kind of creditboards.com tweak you can do to make it better? Maybe. It seems like you've been shopping around at sites like that... some are good, some aren't. Creditboards is usually where we send people who are trying to regain their credit scores. FWF is more into exploiting our higher scores. Please don't take offense, I'm just trying to share the focuses of the two boards. You are well on your way to getting into the FWF side of things.

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debentureboy said:   You won't get the reduction in interest paid if you simply prepay your loan without it going to the principal. Some institutions allow this, some don't. So if you are interested in decreasing your total interest paid on the loan, you need to pay down the principal.  
 


If it is a simple interest loan then should it matter if it goes towards principal or just credits the account. Either way the amount owed should be principal minus the credit and interest should be calculated based on that.
I suppose this is what I have to confirm with my lender.
I'm going to make an extra 500.00 payment and have them not apply it towards principal and then look at the next payment's interest.
I'll be sure to pay it on the same day of the month to ensure interest is calculated evenly.

Brian

Brian

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brianparow said:   
debentureboy said:   You won't get the reduction in interest paid if you simply prepay your loan without it going to the principal. Some institutions allow this, some don't. So if you are interested in decreasing your total interest paid on the loan, you need to pay down the principal.  

If it is a simple interest loan then should it matter if it goes towards principal or just credits the account. Either way the amount owed should be principal minus the credit and interest should be calculated based on that.
I suppose this is what I have to confirm with my lender.
I'm going to make an extra 500.00 payment and have them not apply it towards principal and then look at the next payment's interest.
I'll be sure to pay it on the same day of the month to ensure interest is calculated evenly.

Brian

Brian

  Interest is based on the outstanding PRINCIPAL balance.  If you send them $500 that is not applied to principal, it will not reduce the interest due on your loan.  You will have given them a $500 interest free loan of your money.  In such a case, they would probably apply your $500 to you next payment when it comes due, unless you tell them again to just keep your money.
With my mortgage, if I pay more than the standard payment amount on the due date, the excess is applied to the principal and reduces future interest.  If I send in payments other than on the due date, they are treated as voluntary advance payments, do not reduce interest and only extend the due date for the next payment.  

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Has anyone tried that new Lenny app? It let's you open a credit line that's meant to build your credit score?

A few of my friends have opened credit lines with the new Lenny app (only in California I think right now) and so far they only have good things to say. It has great reviews in the App Store (apple). Anyone else have any experience with it?

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Yes, I've tried it and it is GR8 with a capital 8!

My brother in law is the chief coder, and man is he AWESOME!

My credit score went from 800 to shill in five minutes!

Thanks for sharing this with us and a BIG welcome to Fatwallet. You are the kind of guy we are looking for here!

ETA:  I can't wait until the companion app "Squiggy" comes out! 

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The Lenny app insists on stroking soft things.  Is this normal??

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Chase Freedom Unlimited CC "non-payment" question:

I have a lot of store returns recently.  CSR said I don't need to make a payment because the store return credits exceed the statement balance.  However, I received a warning letter today from Chase saying I have 2 consecutive months of using store returns credits as CC payments.  They'll close my account if I do this again.  Is this practice really not allowed?

Thanks!

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Someone got ahold to my account number and routing number. What could they do with it.? We are having a debate. I believe there is nothing.

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LongDongSilver said:   Chase Freedom Unlimited CC "non-payment" question:

I have a lot of store returns recently.  CSR said I don't need to make a payment because the store return credits exceed the statement balance.  However, I received a warning letter today from Chase saying I have 2 consecutive months of using store returns credits as CC payments.  They'll close my account if I do this again.  Is this practice really not allowed?

Thanks!

  Similar to overpaying and having a credit balance, this is suspicious behavior that the CC companies don't like and will shut you down for it if you do it multiple times.

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BostonOne said:   
LongDongSilver said:   Chase Freedom Unlimited CC "non-payment" question:

I have a lot of store returns recently.  CSR said I don't need to make a payment because the store return credits exceed the statement balance.  However, I received a warning letter today from Chase saying I have 2 consecutive months of using store returns credits as CC payments.  They'll close my account if I do this again.  Is this practice really not allowed?

Thanks!

  Similar to overpaying and having a credit balance, this is suspicious behavior that the CC companies don't like and will shut you down for it if you do it multiple times.

  If Chase closes my account like this, will it hurt my credit score?  How do I avoid getting flagged if I have a lot of returns?  Just pay the statement balance regardless?

rated:
LongDongSilver said:   
BostonOne said:   
LongDongSilver said:   Chase Freedom Unlimited CC "non-payment" question:

I have a lot of store returns recently.  CSR said I don't need to make a payment because the store return credits exceed the statement balance.  However, I received a warning letter today from Chase saying I have 2 consecutive months of using store returns credits as CC payments.  They'll close my account if I do this again.  Is this practice really not allowed?

Thanks!

  Similar to overpaying and having a credit balance, this is suspicious behavior that the CC companies don't like and will shut you down for it if you do it multiple times.

  If Chase closes my account like this, will it hurt my credit score?  How do I avoid getting flagged if I have a lot of returns?  Just pay the statement balance regardless?

  Pay the balance before the refund hits and get a check.

rated:
jbrown66 said:   Someone got ahold to my account number and routing number. What could they do with it.? We are having a debate. I believe there is nothing.
  That information is not secret.  It's printed on the front of any check you sign.  The person could do something with it, but the security of the system is retroactive, not proactive.  You might want to change your account number to avoid any hassle of talking to the bank or police if there are fraudulent charges later and they ask you which charges to dispute.  My account/routing numbers were once used to buy things at WalMart about 300 miles away, and I didn't even know about it until the police called me to tell me they had caught the person.  I was asked to identify which charges to reverse, and that was that.

rated:
LongDongSilver said:   
BostonOne said:   
LongDongSilver said:   Chase Freedom Unlimited CC "non-payment" question:

I have a lot of store returns recently.  CSR said I don't need to make a payment because the store return credits exceed the statement balance.  However, I received a warning letter today from Chase saying I have 2 consecutive months of using store returns credits as CC payments.  They'll close my account if I do this again.  Is this practice really not allowed?

Thanks!

  Similar to overpaying and having a credit balance, this is suspicious behavior that the CC companies don't like and will shut you down for it if you do it multiple times.

  If Chase closes my account like this, will it hurt my credit score?  How do I avoid getting flagged if I have a lot of returns?  Just pay the statement balance regardless?

Why so many returns and why returns that cover the entire account balance? If you have a lot of returns, but also a lot of purchases that are not returned, they won't care as much.

If they close your account, it could hurt in two ways:
1. Average account age. If this is an older card, it could reduce your average account age and lower your score.
2. Utilization: If the closure of this card increases your utilization from under 10% to over 10%, it will have a negative impact on your score.

Separately, many retailers track returns and will ban you after a certain point.

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jbrown66 said:   Someone got ahold to my account number and routing number. What could they do with it.? We are having a debate. I believe there is nothing.
  Get to your bank ten minutes ago.  If not possible - CALL THEM and then get there.  You may have to make a police report too.
  With that information, your account can be drained and someone could set that info into dozens of sites at payments drawn against your checking account.  You may be lucky -  you may not.  It could be totally drained by morning.

rated:
Real estate investment question:

Is there any way to invest in rental residential properties for steady income stream without going through the hassle of being a landlord?

Thanks!

rated:
Look into a REIT on the stock market. There are some that specialize in the kind of property you seek to invest in. Do NOT get involved in a partnership which you become open to liability if something goes wrong.

rated:
You can also buy a property and hire a property manager to do the work for you. If the manager does their job well then you should be able to do everything and just send you a monthly check & status reports. You do have to pay the manager (usually 10% give or take) and finding a good one can be hard.

rated:
JW10 said:   Look into a REIT on the stock market. There are some that specialize in the kind of property you seek to invest in. Do NOT get involved in a partnership which you become open to liability if something goes wrong.
  I love the idea, don't like the timing.  REITs have been on a tear the last several years, so I wouldn't enter now unless you have the stamina to survive a big downturn or prolonged period of slow / stagnant growth.  

I looked at fourplexes to twentyplexes a while back and I'm OH-SO-GLAD I didn't dive in.  I think there are lots of easier ways to make money.  

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