SyntheticDivision
Dryer sheet wannabe
- Joined
- Mar 10, 2006
- Messages
- 15
DonkeyTown said:
If you don't mind, who did you refinance with?
What would you do?
- Thread starter SyntheticDivision
- Start date
If you don't mind, who did you refinance with?
SD
I agree with pretty much everything SteveR says. 8% is a pretty high interest rate as far as interest rates go. Paying it off first is by far the best choice.
Also, I don't know how much you know about PMI, but for my 109k house, I paid $75 a month. (That seems a little high compared with what others are paying, but it's in the range). Now, until you get 20% in the house, you pay that every month, and it's just like take $75 and paying the banks insurance. I remember when I first bought my place - I knew nothing about buying a house - when she said "PMI will be $75 a month" I told her - "oh no, I don't need that insurance, I know that I'll always pay my bill" - haha how clueless I was.
So I paid PMI for about 2 years and the price of my home skyrocketed. I was able to have it taken off, due to the amount of equity in my home thanks to the price increase.
I also only paid 3% down, which I would never ever do again -ESPECIALLY not in this market. I think even paying only 10% down is an unwise decision. Then again, paying rent for that much longer may be unacceptable to you.
Also, please make sure that you're keeping cash in reserve for those unexpected things. I would never feel comfortable without at least $5,000 in reserve (and I mean after you make your downpayment) just because anything can and will happen.
Keep the car loan and make the savings and downpayment a priority. The mortgage even on your house is bound to be over 3%, and the student loans are at an unacceptable rate.
Finally, think about how you will FEEL if you bought a house, still owed $25k on the car, 30-35k on the school loans, AND had the additional burden of the mortgage. (I would feel too stressed out for that to be acceptable).
Good luck brother.
I agree with pretty much everything SteveR says. 8% is a pretty high interest rate as far as interest rates go. Paying it off first is by far the best choice.
Also, I don't know how much you know about PMI, but for my 109k house, I paid $75 a month. (That seems a little high compared with what others are paying, but it's in the range). Now, until you get 20% in the house, you pay that every month, and it's just like take $75 and paying the banks insurance. I remember when I first bought my place - I knew nothing about buying a house - when she said "PMI will be $75 a month" I told her - "oh no, I don't need that insurance, I know that I'll always pay my bill" - haha how clueless I was.
So I paid PMI for about 2 years and the price of my home skyrocketed. I was able to have it taken off, due to the amount of equity in my home thanks to the price increase.
I also only paid 3% down, which I would never ever do again -ESPECIALLY not in this market. I think even paying only 10% down is an unwise decision. Then again, paying rent for that much longer may be unacceptable to you.
Also, please make sure that you're keeping cash in reserve for those unexpected things. I would never feel comfortable without at least $5,000 in reserve (and I mean after you make your downpayment) just because anything can and will happen.
Keep the car loan and make the savings and downpayment a priority. The mortgage even on your house is bound to be over 3%, and the student loans are at an unacceptable rate.
Finally, think about how you will FEEL if you bought a house, still owed $25k on the car, 30-35k on the school loans, AND had the additional burden of the mortgage. (I would feel too stressed out for that to be acceptable).
Good luck brother.
SyntheticDivision
Dryer sheet wannabe
- Joined
- Mar 10, 2006
- Messages
- 15
thx Virginia
DonkeyTown
Confused about dryer sheets
- Joined
- Mar 30, 2006
- Messages
- 2
I consolidated with the Federal Government. Now that interest rates have moved up, I doubt that rates that low are available. However, it's still worth looking into, because you might be able to get a fixed rate lower than 8%. Also, if you set up automatic payments from a bank account, you may get a 0.25% rate rebate. Call up the student-loan people at your former school and ask them about consolidation and the rate rebate for automatic payments.
Another thing you can do is apply for one or more low-interest credit cards. Some cards offer 0% for a year on purchases or balance transfers. So, if you know that you will be able to pay off $4K in loans over the next year, you can get a low-interest credit card and transfer $4K to that. Just make sure you pay off the $4K you transfer to the credit card or, alternatively, transfer that balance to another low-interest credit card. However, beware of balance transfer fees. Most are 3%, but some will transfer with no fee.
I currently have $40K in debt at a 0% rate spread across three credit cards (rbsnb.com, citi, and chase). Last September, Citi actually mailed me a $15K "balance-transfer" check. There was no balance-transfer fee, a 0% interest rate until this September, and no restrictions on what I could do with the money. It was basically free money for a year. I used the check to buy a 9-month CD at 3.5%. So this July, I will be about $400 richer on the back of Citi. Once the CD matures, I will collect my $400 in interest and send the $15K back to Citi. Or, if I can find another credit card issuer willing to take on the balance at a 0% rate, I will transfer and buy another CD.
Of course, you have to make sure to make all the monthly minimum payments on time and to pay off your balance or transfer when the 0% introductory offer ends. This is probably too much trouble for some people, but I like the idea of the credit card companies paying me to borrow money from them.
Another thing you can do is apply for one or more low-interest credit cards. Some cards offer 0% for a year on purchases or balance transfers. So, if you know that you will be able to pay off $4K in loans over the next year, you can get a low-interest credit card and transfer $4K to that. Just make sure you pay off the $4K you transfer to the credit card or, alternatively, transfer that balance to another low-interest credit card. However, beware of balance transfer fees. Most are 3%, but some will transfer with no fee.
I currently have $40K in debt at a 0% rate spread across three credit cards (rbsnb.com, citi, and chase). Last September, Citi actually mailed me a $15K "balance-transfer" check. There was no balance-transfer fee, a 0% interest rate until this September, and no restrictions on what I could do with the money. It was basically free money for a year. I used the check to buy a 9-month CD at 3.5%. So this July, I will be about $400 richer on the back of Citi. Once the CD matures, I will collect my $400 in interest and send the $15K back to Citi. Or, if I can find another credit card issuer willing to take on the balance at a 0% rate, I will transfer and buy another CD.
Of course, you have to make sure to make all the monthly minimum payments on time and to pay off your balance or transfer when the 0% introductory offer ends. This is probably too much trouble for some people, but I like the idea of the credit card companies paying me to borrow money from them.
