Financial question

[AGBF]

Sure, they took nice vacations, bought nice cars and refinanced every time they wanted cash.

People refinance because they want cash?

In our house we refinance when the interest rate changes. There is another rule I forgot to tell you guys. No fixed mortgage rates. I have also begged my husband for a fixed rate mortgage. My husband's answer is, "I have always done very well for us over the years with a variable rate. Believe me, a variable rate is better."

Deb

 

[AGBF]

Deb,no Qs but can tell you this...i have two groups of friends most are ages b/t 50-55.
group #1) they carry no mortgages and are retired in their early to mid 50's.
group #2) say...i can't retire until we payoff our mortgage. this group #2 kept on refi into a new mortgage and start over after every few yrs,b/c they believe in the tax deductable B.S.

Wait a minute...I don't think we do what your friends do. We never increase the principal. We just keep taking out new 30 year loans on what remains. And I'd like to take a short-term loan and pay it off more quickly.

My husband is too old to retire in his 50's, though, so don't try to save him so that he can do that. He turned 60 this summer. Also, he doesn't want to retire.

Thanks just the same.

PS-I don't want him home.

Deb

 

[Dancing Fire]

Sure, they took nice vacations, bought nice cars and refinanced every time they wanted cash.

People refinance because they want cash?

In our house we refinance when the interest rate changes. There is another rule I forgot to tell you guys. No fixed mortgage rates. I have also begged my husband for a fixed rate mortgage. My husband's answer is, "I have always done very well for us over the years with a variable rate. Believe me, a variable rate is better."

Deb

Deb...you got to talk some sence into your hubby's head

a 100K mortgage will cost you 300k on interest after 40 yrs of payment. mortgage rates are at historic low.now,ask him which direction he thinks IR will be headed in the future? 0%??? variable rates is a good idea if IR remains high.

 

[steph72276]

Definitely pay the credit cards off. I agree with others that Dave Ramsey's plan is easy and achievable...get his book Total Money Makeover, it's an easy read.

As far as the paying off house argument goes, I am firmly in the pay it off as quickly as possible camp. I would rather put my money into real estate, then live mortgage free and invest the money I would have been sending to the mortgage company, while saving hundreds of thousands in interest.

 

[charbie]

If you're trying to buy a house in the next 5 years, you need to get your credit cards paid off ASAP in order to get your debt to income ratio down in order to be in a better postition to get a loan. Get the credit cards paid off so you can also improve your credit score. A credit score will get you a better loan rate. Sure, a nest egg is important, but right now any amount going into your interest is money thrown away. You could have 2400 saved in 24 month, or, if you take that 500/month and put it into savings once you pay off the debt, in 18 months, you'll have no credit card debt and 3000 in the bank in the same amount of time.

 

[swingirl]

Sure, they took nice vacations, bought nice cars and refinanced every time they wanted cash.

People refinance because they want cash?

People remove the equity out of their house and get cash to take vacations, make home improvements, pay off credit cards, pay for college, whatever they want.

 

[Dancing Fire]

Sure, they took nice vacations, bought nice cars and refinanced every time they wanted cash.

People refinance because they want cash?

People remove the equity out of their house and get cash to take vacations, make home improvements, pay off credit cards, pay for college, whatever they want.

then some of them walk away from their homes robbing the taxpayers . ...

 

[steph72276]

Yeah, I don't get the argument of a tax write-off. So you're going to pay the mortgage company hundreds of thousands in interest to avoid paying the government tens of thousands? Hmmm. And to do what with the savings, put it in the stock market where it may or may not be there tomorrow? Yeah, I would rather have a paid for house before I am investing tons of money into something risky, call me crazy.

 

[AGBF]

Yeah, I would rather have a paid for house before I am investing tons of money into something risky, call me crazy.

Well, yeah...but that statement got me to thinking. An entrepreneur, by definition, is someone who puts his money into something he believes in and works for rather than putting it into a safe little nest egg and letting it sit. Right?

I am not saying I wouldn't want to pay off my house. I would! But as a blanket statement , one has to acknowledge that in discussing financial risk versus safety that some benefits can accrue from risk. Therefore, what you said above is going too far for me.

Deb/AGBF

 

[steph72276]

Yeah, I would rather have a paid for house before I am investing tons of money into something risky, call me crazy.

Well, yeah...but that statement got me to thinking. An entrepreneur, by definition, is someone who puts his money into something he believes in and works for rather than putting it into a safe little nest egg and letting it sit. Right?

I am not saying I wouldn't want to pay off my house. I would! But as a blanket statement , one has to acknowledge that in discussing financial risk versus safety that some benefits can accrue from risk. Therefore, what you said above is going too far for me.

Deb/AGBF

Deb, how is that going too far when I said that is what I would rather do? I get that some people are not as adverse to risk as I am, but I know if I am debt free, living in a paid for house, and have a nest egg of savings stashed away, I am in a far better spot than someone with a mortgage that decided to risk all their funds in the stock market. I mean sure, they may have a huge payoff, but like I said I am personally adverse to such risks. That's not to say that some of our money is not going into riskier investments because it is, but I like to have my basics covered first, so my main priority is paying off my house.