This is a collection of forum threads authored by the user susckisstaples within the Finance Board of the now shuttered FatWallet Forums.
Please refer to the parent page for information about FatWallet Forums and this project.
The content has not been edited. The entire exchange between users is included. I don’t have the patience to remove all of the hyperlinks, so those are also there. Hopefully, this will not be a complete nightmare.
The INVESTMENT / RENTAL PROPERTY thread!!!!!!
Individual Posts from 2001
2001
| Thread Title: Make $$$ Switching to a Roth IRA (or convert back and save THOUSANDS if you switched earlier) HURRY! Date Posted: Oct/10/2001 11:29 PM Posted By: SUCKISSTAPLES Rank: FW Historian For those who have retirement accounts, a Roth IRA is generally advantageous compared to a traditional IRA as Roth earnings grow tax-free. Instead, they are taxed initially (you dont get the immediate tax deduction on that year’s tax returns). SCENARIO 1: YOU HAVE A TRADITIONAL IRA AND HAVE BEEN CONSIDERING CONVERING IT TO A ROTH IRA SO IT GROWS TAX FREE: If your IRA is a mutual fund, NOW is a great time to convert it from a conventional IRA to a Roth IRA, as the balance is likely 30% or so lower than before the Sept. 11 attacks, so your tax for the switch will be lower…and then your gains will grow tax-free! Example: If you have a traditional IRA which used to be valued at $30,000 but went down to $20,000, converting now to a Roth would only “cost” you tax on that $20,000 , instead of converting later when the fund values go back up and your tax would be more! Plus, all the growth will then become tax free! SCENARIO 2: FOR THOSE WHO SWITCHED TO A ROTH IRA BEFORE THE MARKET DECLINED, CONVERT BACK TO A TRADITIONAL IRA BEFORE OCTOBER 15! If you switched from a conventional IRA to a Roth IRA earlier this year when your IRA was valued much higher, it is also a smart move to CONVERT BACK to a traditional IRA, since you will avoid paying the tax on the conversion at your higher earlier IRA balance. You must do this before October 15! Example: if you had converted a $30,000 conventional IRA to a Roth IRA in January, you would be paying taxes on the $30,000 conversion…since its only worth $20,000 now, CONVERT BACK to a traditional IRA, so you will have no taxable event. THEN, you can re-convert to a Roth AGAIN on Jan 1., but this time you will only have to pay taxes on a $20,000 conversion (assuming the fund values stay low)!!! You just saved the tax on $10,000, or about $3,000! Since you can convert and convert back without penalty, You cant lose on this deal!!! I obtained this information from: http://www.bankrate.com/brm/news/ira/20011009a.asp and http://www.bankrate.com/brm/news/ira/20011009b.asp As always, Consult your tax advisor for specific details. Date Posted: Oct/11/2001 7:48 AM Posted By: Blieb Rank: w00t! I opened a Roth IRA this year … so neither really applies to me … But I figured I’d put some meat in this thread Date Posted: Oct/11/2001 10:13 AM Posted By: msh11 Rank: Senior Member 2K Great post! We’re now considering doing this and thanks for the links. Date Posted: Oct/11/2001 5:26 PM Posted By: pofig37 Rank: Senior Member Date Posted: Oct/12/2001 2:55 AM Posted By: SUCKISSTAPLES Rank: FW Historian You are correct, they both “grow” tax free, but with a Roth, at retirement your DISTRIBUTIONS will not be taxed, and you will not have to pay huge taxes in your senior years…which will help us greatly when cashing them in during our later years! Date Posted: Oct/12/2001 2:13 PM Posted By: pofig37 Rank: Senior Member The main advantage of Roth IRA does not come from when the money is taxed. It might actually be a disdvantage, since when you’re retired and taking distributions it is likely that your tax rate will be lower than what you’re taxed now. The real advantage is that it lets you, in effect, invest more money than you would be able to do with traditional IRA. $2,000 after-tax annual contribution to your Roth IRA is roughly equivalent to investing $3,000 into a traditional IRA. However, IRS limits investment to Traditional IRA to $2,000. Similarly, when you’re converting, you get an advantage if you pay taxes with extra money that you have. You would get the same effect if you could take that extra money (before-tax) and put it into your existing trditional IRA, but you can’t. The best you could do with that money is to put them into a regular investment account with no tax-breaks. Conversion lets you get around this limitation and enjoy tax-breaks on that extra money. Date Posted: Oct/14/2001 12:55 PM Posted By: RagingBull Rank: Ancient Member if you’re already 63 can i still have roth ira? Date Posted: Oct/14/2001 4:07 PM Posted By: SUCKISSTAPLES Rank: FW Historian yes you can convert but the wont be able to reap the advantages a Roth IRA gives to someone who is investing long-term Date Posted: Oct/14/2001 5:32 PM Posted By: scamhi Rank: Senior Member An EXCELLENT site on this matter is fairmark. Click Here to see their info on this situation. FYI, technically this is called a ‘Recharacterization’ of your IRA account.. Message edited by: scamhi on 10/14/2001 17:33:03 |
| Thread Title: Get your credit score for free, Improve it, legally, get better loan rates and SAVE $$$! Date Posted: Oct/10/2001 11:47 PM Posted By: SUCKISSTAPLES Rank: FW Historian Many people here want to know more about their credit score and how to find it out…simple! Many places make you PAY for your credit score, but you can get it free! Go to http://www.eloan.com towards the bottom of the page there is a button to click that says “credit scores” You need to supply all accurate personal information, including social security, so if you are not comfortable doing it online, dont do it. You can also get your credit report free if you have been denied credit, but you do not usually get your credit score (except in real estate loans). Any credit “denial” letter usually has info on how to obtain your report. Remember, your credit REPORT show the accounts you have, the balances, and payment history. Your credit SCORE is like a SAT score, which uses the information in your credit report to “grade” you on how good your credit is. You can get credit reports online at http://www.experian.com (free if you got a denial, otherwise you may have to pay a fee)..they charge for credit scores. NOW THAT YOU KNOW YOUR CREDIT SCORE AND WANT TO IMPROVE IT (or even if you dont want to find it out right now but want to take steps to start improving it) Heres some tips: 1. Pay all bills on TIME. – DUH! Late payments cost you MUCH MORE in the long run than the few extra days you get by delaying. Plus they can be used to consider you in “default” and charge you a higher interest rate on existing accounts. EXAMPLE: if you are paying Credit Card X on time every month but you pay Credit Card Y late, CREDIT CARD X CAN RAISE YOUR RATES! Even though you have always paid Card X on time! 2. Dont max out any particular credit card. If you have a credit card with a $5,000 limit and its charged to the max, its hurting your credit score much more than if you had 2 credit cards with $5,000 limits but only $2500 balances on each. If you have a large credit card debt, spread it out over a few cards, try to keep a cushion of available credit at 50% or more. Also try to make sure the cards you carry a balance on are “low-rate” cards (10% or less APR)…department store cards are usually over 20%, so try to pay those off or transfer the balances to a low rate card…. Doing these 2 simple things can raise your credit score 100 points or more in just a few months…which could mean a percent or two difference on large loans like mortgages and auto loans! Message edited by: SUCKISSTAPLES on 10/10/2001 23:55:50 Date Posted: Oct/11/2001 12:04 AM Posted By: Cyberbishop Rank: Charter Member Thanks for the Credit Score info I reportedly have 6 credit accounts…that’s 4 more than what I’m aware of… Guess I’ll get a credit report when I have a chance… Date Posted: Oct/11/2001 12:08 AM Posted By: SUCKISSTAPLES Rank: FW Historian glad you were able to use the info! remember a “credit account” can be more than just a Visa/Mastercard – it can be: Department Store Cards Gas Station Cards Student Loans Home Mortgage Car Loan etc… so even if you only have 2 credit cards, you may have several “credit accounts” Date Posted: Oct/11/2001 12:28 AM Posted By: baoytl Rank: Senior Member > What about bills like cable, phone, electric/gas, cell, rent,… Date Posted: Oct/11/2001 12:37 AM Posted By: Cyberbishop Rank: Charter Member My impression is utility bills don’t get reported as quickly as credit cards and loans do; you may still get late penalties, but I think you won’t get reported until you’ve reached the stage where they have to cut off the service. Not sure about rent, though. Date Posted: Oct/11/2001 12:37 AM Posted By: SUCKISSTAPLES Rank: FW Historian Good question! Those types of bills are NOT normally listed on a credit report: utility bills (cable, cell phone, power, etc.) medical bills, medical and auto insurance…etc… unless they were delinquent and sent to collections, and collections didnt resolve it …generally those types of bills do NOT appear on your credit report..simple late payments of these bills do not get noted, UNLIKE credit accounts… late rent will only hurt you in getting a prior landlord’s recommendation or if he got a legal Judgment against you… so if you are having financial difficulty and are forced to not pay certain people, its wiser to pay creditors before these bills to keep your credit report “clean” Message edited by: SUCKISSTAPLES on 10/11/2001 00:39:23 Date Posted: Oct/11/2001 12:38 AM Posted By: zulugrid Rank: Ancient Member hmmm eloan.com requires you to type in 2 credit accounts you have/had to verify that you are requesting your own account, and i can’t seem to find more than 1 that is on my report. oh well. guess i’ll have to get my credit report. thanks for the info! Date Posted: Oct/11/2001 12:47 AM Posted By: zulugrid Rank: Ancient Member how weird.. i went to get my credit report at the http://www.experian.com place, and it says that i “probably” have a mortgage from many years ago, and a loan from last year (i couldn’t actually see my report; it says it has to be sent via mail). this probably isn’t that strange for most people, but i am only 16, and i doubt i got a mortgage when i was 13. i can’t wait to get my credit report and see what interesting things are in it. Date Posted: Oct/11/2001 12:48 AM Posted By: kirbydog Rank: Crabby Thanks! Too bad my SAT scores weren’t this good. Date Posted: Oct/11/2001 7:53 AM Posted By: Blieb Rank: w00t! Damnit, 2 of the images on the “security code” aren’t freakin’ workin’ … Date Posted: Oct/11/2001 2:06 PM Posted By: sheabird Rank: Thrifty Member Thanks SUCKISSTAPLES for the info but doesn’t your credit score go down if you have multiple inquires in a short time frame? Do you know when eloan pulls your report whether or not it shows up as a full inquiry or not? Date Posted: Oct/11/2001 2:49 PM Posted By: Blieb Rank: w00t! sheabird – it says it doesn’t … I can’t remember where it says that exactly, but I DO remember reading it in the fine print … Date Posted: Oct/11/2001 3:43 PM Posted By: Willywonka Rank: The CandyWoman Got this from the site Will an inquiry appear on my credit report when I request my CreditXpert Credit Score? The request for the credit report used to create the CreditXpert Credit Score is classified as a consumer request for a credit report. Therefore, it should not appear on the copies of your credit report that are supplied to lenders, and should not have a negative impact on your credit rating or credit score. Date Posted: Oct/12/2001 3:01 AM Posted By: SUCKISSTAPLES Rank: FW Historian Too many inquiries does not hurt your score that much (not as much as a late payment!) but Yes, too many inquiries in a short period of time WILL hurt your score a bit, HOWEVER, for people that are “loan shopping” , all inquiries within a 2 week period are counted as “one” inquiry when scoring you… So DONT BELIEVE ANY LENDER who tells you not to comparison shop b/c your score will go down with too many inquiries! These are scare tactics to prevent you from shopping for the best rates! Date Posted: Oct/12/2001 8:15 AM Posted By: sheabird Rank: Thrifty Member thanks Blieb, Willywonka and SUCKIS for the follow up. Date Posted: Oct/13/2001 12:39 AM Posted By: Raiz Rank: Ancient Member How do I know if the score that I have is good or bad? I’m very new to this. I am only 21 years old, and have 4 credit cards of limits $1500, $3000, $6500, and $7500. I guess for them to give me a credit limit of $7500 on one card, I must have pretty good credit, but what is a good score? [EDIT]Credit Score Not Found Status: We were unable to retrieve your credit record. This can happen if you do not have enough information in your credit report to generate a score, or if some of the personal information you provided is incorrect. Please check your name, address, and Social Security Number[/EDIT] I entered all the info correctly, but it wouldn’t show me anything. Oh wellz, guess I’m outta luck. Message edited by: Raiz on 10/13/2001 00:47:43 Date Posted: Oct/13/2001 1:21 AM Posted By: nj Rank: Senior Member I used to work in the closed credit department of a major utility in Washington state. Believe me, they WILL send you to collections. But everybody is right, they won’t send your bill for quite awhile. Sometimes you have up to 3 months. They will always send a letter first that gives you an extra 7 days. Date Posted: Oct/13/2001 3:07 AM Posted By: SUCKISSTAPLES Rank: FW Historian yes a utlility (or doctors office, etc) will sent your late bill to a collection agency, but it will first take SEVERAL MONTHS before that happens…and then the collection agency will attempt to collect for a few months, etc….AND you can pay that debt off during any of that time and it will NOT show up on your credit report….no future creditors will ever know. But if you make a car payment or credit card payment even 10 days late, IT WILL SHOW UP. And it will COST YOU in the long run. So make sure those payments get in on time! Date Posted: Oct/15/2001 12:53 AM Posted By: loggia Rank: Senior Member 4K Here are some tips: 1. Too many requests can hurt your credit rating quite a bit. In general, the last six months is most important. Be prudent about what you apply for (see below). 2. Too many cards can hurt your credit rating. Although it seems counter-intuitive, having a dozen department store cards is perceived negatively. So when a store offers you 10 percent off instantly for getting their card, you might want to pass. How many cards is the right number? No one knows. Moderation seems to be a good guide. 3. Get a gas card. This seems to improve the credit score. Again, no one knows why. 4. If you already have a negative item on your report from a collection agency, see if you can negotiate with them to have it removed if you pay in full. Technically they are not supposed to do this, but they want to be paid. It is far better to have an item removed than have it listed as “paid in full” for seven years. 5. You have nothing to lose by asking the credit reporting agencies (CRAs) to investigate negative items – and everything to gain. Many collection agencies do not bother to respond to queries from credit bureaus. If a creditor does not respond in 30 days, the item must be removed. 6. Be wary of services that combine all your reports into one. You want to examine each report from all three agencies: Equifax, Trans-Union and Experian. You will find your reports may vary widely from agency to agency. Each report is separate and must be handled as such when asking for corrections/investigations. 7. In some states you can get one report from each bureau free each year. In all states, if you have been recently denied credit in the last 60 days, you can get a free report from the agency referred to in your rejection letter. You may also qualify for a free report if you are recently unemployed or other circumstances. Otherwise, the reports are relatively inexpensive. Date Posted: Oct/15/2001 11:50 PM Posted By: GreedyBumps Rank: Ancient Member Can the score that I got on e-loan (about 6 months ago) be updated now? I can’t seem to figure it out – but it would nice to see if it improved any… Date Posted: Oct/16/2001 12:35 AM Posted By: loggia Rank: Senior Member 4K I’m not sure I follow you, but the credit score is a “snapshot.” Six months later it could be very similar if your credit reports are relatively unchanged. Or it could be very different if your credit reports are very different. Plus, depending on what outfit scored you (not getting into that now) the factors for scoring can be periodically altered slightly depending on across-the-board credit trends. So the exact same credit report may not get the exact same score. I may have just confused you more… Date Posted: Oct/17/2001 10:10 PM Posted By: bssc Rank: Senior Member 10K If you are interested in learning more about your FICO credit score and what makes it up, you can go to the Fair Score WebSite which discusses lots of scoring issues. And remember that no having a credit history impacts your score as well. Date Posted: Oct/18/2001 12:12 AM Posted By: loggia Rank: Senior Member 4K I don’t know. They are pretty vague, intentionally so. Fair Isaac (FICO) is the main source for credit scoring and strongly resisted letting consumers get their own credit scores. They claimed, in not so many words, that consumers were too dumb to understand them. Once legislators finally had enough and regulation was a certainty, they did an about face and decided to sell the information to us. Suddenly, we became “smart.” I guess their guide is a good primer, but it doesn’t actually tell you how your score is created. For more info on the secretive underbelly of the credit reporting industry, see Greg Fisher’s excellent creditscoring.com. Date Posted: Oct/18/2001 7:17 AM Posted By: OzzyBurger Rank: Senior Member >>>What about bills like cable, phone, electric/gas, cell, rent,… I recently got a copy of my credit report and my cell phone account is listed – it doesn’t have the highest amount or the balance, but it does say that it was never paid late, so yeah, I guess they do report ya every month. (fyi it’s AT&T Wireless) Ozzy Date Posted: Oct/18/2001 10:00 AM Posted By: lokogrrrl Rank: Shopaholic Member Yes, AT& T Wireless does report monthly – so does my gas utility – I actually work for the electric company and I know we report also – but my residential phone company and cable company both do not report soooooo I guess it basically comes down to whether the company feels like telling the bureaus what you’re up to or not. Credit cards generally report monthly as do mortgages, auto loans, personal loans etc. Its amazing how much everyone is in your business nowadays. ***I wanted to add – if an item is NOT listed in your report and you would LIKE it to be – you can contact the credit bureaus (Equifax , Transunion, Experian) and for a small fee (about $3-$5) they will contact the creditor and obtain the information and add it to your credit file – just make sure before doing this that having this account on your report will be to your benefit -i.e. you have not made any late payments on the account and you are nowhere near your credit limit. Message edited by: lokogrrrl on 10/18/2001 10:03:47 Date Posted: Oct/19/2001 5:05 AM Posted By: OzzyBurger Rank: Senior Member >>>, but i am only 16, and i doubt i got a mortgage when i was 13 zULuGriD – how can you have credit when you’re 16? I thought you had to be a minimum of 18 to get credit, since when you’re underage, you can’t be bound to a contract (i.e. terms of the agreement). How’d ya do that?????? =-) Ozzy. Date Posted: Oct/19/2001 10:30 AM Posted By: ExperiencedNewbie Rank: Ancient Member How trustworthy is this score? I was expecting a much lower score since someone stole my credit card without my knowledge and it was just sitting with all it’s late fees, this was last year btw. But it turns out my score was not too shabby it was on the high side. any thoughts? tia, en Date Posted: Oct/19/2001 12:17 PM Posted By: BenFranklin Rank: Senior Member Suckisstaples What’s the range of a credit score? you always hear people talk about such such score is goood, such such score is on the border, etc. But what’s the range? What’s THE highest one can get on his credit rating? SAT=1600 Date Posted: Oct/19/2001 9:33 PM Posted By: TheGMan Rank: Charter Member BenFranklin, THIS should help. ExperiencedNewbie, are you asking how accurate the FICO score is? Generally, very accurate. If your cards were stolen, then any delinquency that was involved with the theft (if the total amount was the sole result of the theft) should have been removed from your report; hence raising your score. As far as I know, most institutions do not hold you responsible for the balance of fraudulent activity, and any resulting negative scoring is not applicable. The only way to know for sure that your report has not been affected would be to get a copy. I would suggest doing so anyway, just to make sure that any erroneous reporting is not still lingering. Date Posted: Oct/19/2001 10:37 PM Posted By: SUCKISSTAPLES Rank: FW Historian I STAND CORRECTED. SOME utility companies, cellular phone companies, etc. DO REPORT on your credit report. Some dont. So get a copy of your report and find out WHO IS ON THERE before deciding to make ANY late payments to these people! From my personal experience, I know that PG&E and sprint PCS, and AT&T @home cable modem do NOT report on my credit report. Thats no guarantee they dont report on yours. I recently discovered AT&T wireless (cell phone) DOES REPORT on my mom’s credit report…so be vigilant! REGARDING CREDIT SCORES: There are a number of bureaus that calculate credit scores, and the scoring systems are all slightly different…the RANGE is generally 300-900 (some places its 350-850, etc). Theres a credit “curve” involved, as follows: Anything over 700- EXCELLENT CREDIT, you will have no problems qualifying as long as you dont have too much debt and have good income. Doesnt matter if you are 750, 800, 850 or 900…you get NO EXTRA BENEFITS. Then the range gets much narrower… about 650-700 – GOOD credit 600-650 AVERAGE below 600 – below Average… the links others have provided explain these…the drawback to having a low credit score includes : HIGH RATES when you apply for large purchase such as a car or house, or even inability to qualify.. HOW TO HAVE CREDIT UNDER 18 YEARS OLD There are three ways to have credit on your report before you are 18: 1. Mistake, where they report a mother or father’s credit on your report (I have some credit accounts dating back to 1963 on my credit report, even though I was born in 1974! This is b/c my dad and I have the same name and the cc companies are not too careful when reporting) 2. You applied for a credit card and lied or didnt state age. I know friends who applied for the Target card in the store who either lied about their age, or didnt state it, and got credit before they were 18. 3. Your parents gave you a credit card as an “authorized user” on their account. This will normally also show up on YOUR credit report. You are “supposed ” to be 18 to get the additional card, but some places dont ask and dont verify… Message edited by: SUCKISSTAPLES on 10/19/2001 22:42:59 Date Posted: Oct/20/2001 10:16 AM Posted By: BenFranklin Rank: Senior Member Thanks TheGMan and Suckisstaples. Cool I think my credit score is 700.0000000000000000000000000000000000000000000000001 I’m safe, whew! Date Posted: Oct/20/2001 11:10 AM Posted By: baoytl Rank: Senior Member Good info, Does anyone know if having a deferment or a forbearance on a (student) loan hurts? Date Posted: Oct/23/2001 1:33 AM Posted By: loggia Rank: Senior Member 4K > Ha, ha. No, the credit score is not particulary accurate. Experienced people in the mortgage industry will tell you that the scores can be baffling and inexplicable. A 19-year-old with a car loan can have a 800 and a guy with 20 years of superb credit experience can have a 650. Why? NO ONE KNOWS! The very generalized info FICO has on their website is not the proprietary formula they use to generate your score. They consider this akin to the formula for Coca-Cola and the Colonel’s 11 secret herbs and spices. Many people consider it akin to !@#$?*&. Also, a word of warning. The credit scores some credit bureaus are now offering are not the FICO score. It is their own “brand” of score for consumers and may not match the FICO score most lenders are going to use. This is all so new it isn’t clear how well these other scores match up to FICO… Date Posted: Oct/23/2001 1:43 AM Posted By: loggia Rank: Senior Member 4K > Not sure, but your student loan balance reports as debt whether or not you are in deferment. So if your obligation to pay off the loan is equal to, or more than, a creditor feels you can support, you might apply for something and get a notice that says “SUFFICIENTLY OBLIGATED.” Date Posted: Oct/23/2001 5:06 AM Posted By: Cornrow Rank: Happy Member Thanks for a very interesting thread. I love credit. Ty Date Posted: Oct/23/2001 2:25 PM Posted By: OzzyBurger Rank: Senior Member >>REGARDING CREDIT SCORES: There are a number of bureaus that calculate credit scores, and the scoring systems are all slightly different…the RANGE is generally 300-900 (some places its 350-850, etc). I got my credit report from Trans Union… says 150 is the minimum – 934 is the highest possible. Wish these things would be uniform! With that in mind, how can you have excellent credit in the 700’s? This just doens’t make sense to me. Ozzy. Date Posted: Oct/23/2001 7:19 PM Posted By: SUCKISSTAPLES Rank: FW Historian they arent supposed to make sense to “regular” people….thats why theres dozens of different scores, and diffreent places that create the scores… One particular lender will use the scores from one score supplier, so they will know whats “good and bad” accoridng to their own scale..its designed intentionally to be confusing, and also prevent manipulation….not everyone uses FICO… Date Posted: Oct/24/2001 1:32 AM Posted By: DaveHanson Rank: Senior Member 6K loggia, where’d you get your 7 points? Is that from creditscoring.com (for which I second the recommendation–great site) ? Or somewhere else? A few tips, like the gas card, that I hadn’t heard before. SUCKISSTAPLES, I thought it’d been said you were an old guy…props to you for knowing so many tricks at a young age I’m a 32 year old philosophy professor, about to apply for law school while I teach, FWIW. Date Posted: Oct/24/2001 1:55 AM Posted By: SUCKISSTAPLES Rank: FW Historian I’m 26, which is relatively old compared to most forum users, but Im no senior citizen! Good choice on law school, I graduated law school 2 years ago (and have just been piddling around with hot deals and real estate instead of working 90+hours a week as a new associate) but I know I will need that damn income to buy more R.E. pretty soon… even if you dont practice it keeps people from ever screwing you and teaches you to question everything and always get the best end of a deal…remember, if someone says there’s “no way” to do something, theyre lying….you just need to work around it… =) Date Posted: Oct/24/2001 9:58 AM Posted By: DaveHanson Rank: Senior Member 6K I hear you on the 90+ a week sucks routine. I’m ABD in my philosophy PhD from the University of Chicago, my wife is University of Chicago Law 1996. We’re back in Spokane in part so she can avoid the rat race I teach full time at Gonzaga University–political philosophy, critical thinking, ethics, and philosophy of public policy, and have done coursework in philosophy of law. So, law school at GU aside from (hopefully) being picked up by the school, will be a good way to boost my teaching competency. Thanks for the biographical details. Nice to get to know you a bit. Date Posted: Oct/24/2001 11:44 AM Posted By: waterman Rank: Senior Member For a fee, the credit score agencies will manually change the account balances on your credit report. We found a house that we liked and applied for a loan. We just paid off two huge credit card balances that were still appearing on the credit report. The mortgage lady called the credit agency and they manually called all of the banks to confirm that the credit cards were paid off. Within a few days, our credit score shot up (got rid of two maxed out cards) and the payments were removed from the credit report. Date Posted: Nov/09/2001 8:30 AM Posted By: sheabird Rank: Thrifty Member Question for the board.. My recently consolidated student loans are catergorized as “finance company” accounts. I know this can affect your credit score but should they be reported as this? The one consolidation I did with Direct Loan is shown as student loan, but the others with South Carolina Student Loan Corporation are not.WTF? Also, I wanted to let everybody know there can be a substantial difference between the eloan credit score and your actual score generated for your loan/line application through a lender,bank,etc. my eloan score=697, lender generated score through equifax=658. Date Posted: Nov/09/2001 9:02 AM Posted By: waterman Rank: Senior Member my eloan score=697, lender generated score through equifax=658. Difference in scores could be from -Your scores change all the time – if you paid off a credit card, your score increases -The scores vary between credit agencies – Just ran a report that included scores from the 3 main agencies – difference between high and low score – 130! Date Posted: Nov/09/2001 5:19 PM Posted By: loggia Rank: Senior Member 4K loggia, where’d you get your 7 points? Is that from creditscoring.com (for which I second the recommendation–great site) ? Or somewhere else? A few tips, like the gas card, that I hadn’t heard before. I wrote the 7 points off the cuff; the info is from a combination of articles and experience. I don’t remember where the gas card info is from… I believe it and there is no harm in adding a gas card anyway. Date Posted: Jan/12/2002 5:38 AM Posted By: speedman Rank: New Member my eLoan score is 758. This is so strange. Three months ago I couldn’t get a credit card anywhere, including those $500 “everyone gets pre-approved” cards. Then I got a credit card under somebody else’s name about 8 weeks ago, then when I open a checking account at Bank of America about two weeks ago, they gave me a $7500 Platinum CC. I Just received it today and still couldn’t understand how my credit score improved so much in such a short time period. Date Posted: Jan/12/2002 6:36 AM Posted By: Jfur Rank: Member OK, How many card is too many!!?!?!? How much credit availability is too much!!!?!?!?!? Message edited by: Jfur on 01/12/2002 06:36:43 Date Posted: Jan/12/2002 8:10 AM Posted By: loggia Rank: Senior Member 4K No one knows. Date Posted: Jan/15/2002 12:09 AM Posted By: bssc Rank: Senior Member 10K It really is a mystery. I work with people who build credit scoring models and sometimes they can’t tell me why there are variations in scores. (part of it is that the models have been around for awhile). But that just like code anywhere. Date Posted: Jan/15/2002 6:14 AM Posted By: SUCKISSTAPLES Rank: FW Historian how much is too much totally depends on the peroson/lender looking at your file… I have over 50 credit cards and over $1 million in credit lines, all w/0 balances…credit score is still above 750. Lenders have only cared about the cards that had balances. Onyl stupid Netbank once said “you jave too much available credit and are not a good risk”. but despite that it didnt stop them from lending to me. If you pay on time you are AOK. Date Posted: Jan/15/2002 12:28 PM Posted By: jedinite Rank: Happy Member 50 CC’s?! WHY? Good lord where do u put them all and how the hell do you keep track of em?! Date Posted: Jan/15/2002 2:30 PM Posted By: slackstate Rank: Member I heard that having “different” types of CC can help your credit history. I.e. Having a DEPARTMENT STORE CARD GAS CARD VISA or MASTER CARD each being a different type of card shows a person has good credit history. Taking out a SMALL loan and paying for it say 2 year loan or 1 year loan. yes you get ding’d interest but that will help your credit history too. p.s. SUCKIS.. that is a lot of CC 50!!!!! geez Date Posted: Jan/15/2002 2:31 PM Posted By: DaveHanson Rank: Senior Member 6K SUCKISSTAPLES, $1 million in credit lines and 50 active CCs is remarkable, esp with a high credit score to boot. I would enjoy reading something like a “how to boost your available credit” thread to see the particular techniques you used to do this. BTW, what CRA gave you a 750? Mine vary a lot–one’s 720 (equifax), another’s 790 (experian), never got a transunion one… Date Posted: Jan/15/2002 6:42 PM Posted By: fasteddie Rank: Ancient Member I got a nice 730 at eLoan. Yes, you can be young (mid 20s am I), have lotsa credit cards (25+) and have a nice credit line. All without buying a house or car even… But I compromise, and live in a box on 4th Ave… Date Posted: Jan/15/2002 9:24 PM Posted By: SUCKISSTAPLES Rank: FW Historian no trick to getting the credit, just applied for about half dozen credit cards each year (I get solicitations in the mail every week) sine I was 18. Didnt need to own car, house, or have an installment loan. Key is PERFECT REPAYMENT HISTORY. No lates at all. My credit scores were from equifax and experian PS…The recent refinancing inquiries (5 in the past 6 months) have dinged my score about 20-30 points, but that will go away in a years time. Date Posted: Jan/16/2002 2:55 AM Posted By: Jfur Rank: Member We have this ongoing problem with Discover who claim that my husband owes them money and that it was sold to a collection agency after he failed to pay them. We have never been contacted by Discover or a collection agency about this and only noticed this after getting a credit report last year. They also refuse to take off two addresses that we have never lived at and that it turns out are the exact addresses of the two major shopping malls in Hawaii! He had a Discover card years ago but did not fail to pay them ($1800 no less). Discover is refusing to budge and won’t check to confirm that those are not “real” addresses. Any ideas what we need to do to legally prove this is all a crock? BTW, the credit agencies all said that the addresses came from Discover and that only they can remove them from his record; in addition to insisting my husband lived in the shopping malls (at the same time no less), Discover claims that they can’t remove them and that they are from someone else. Message edited by: Jfur on 01/16/2002 02:56:34 Date Posted: Jan/16/2002 8:04 AM Posted By: DaveHanson Rank: Senior Member 6K Jfur, post your issue here . Some of the folks here are top notch and willing to help, and I’m sure several have sucessfully disputed scenarios very much like yours. SIS, did you get the one erroneous late you had deleted? I finally did by disputing it with equifax and transunion. Took ’em 2 motnhts, but it’s gone now. Are you subscribing to a credit reporting service, or did you just run myfico again to get the updated scores? I’d pay a reasonable fee to get regular, accurate reporting of the REAL scores from the three CRAs. Date Posted: Jan/16/2002 10:21 AM Posted By: yupod Rank: New Member I do not have any balances on my ccards, but I have many of them. Will my score improve if I close some? Date Posted: Jan/17/2002 2:31 PM Posted By: BlueTDimly Rank: Frivolous Member Don’t know if it belongs in this thread or not, but don’t forget in some states (I live in MA), you are entitled to a *free credit report* from each credit bureau once per year. I don’t know what the rules are for other states, but for MA residents, you have no reason NOT to do this. I know you can at least order your Experian reports online without paying. Note this doesn’t include your credit score, but it’s still free. [edit]Here are the states (according to TransUnion): Colorado Georgia (2/yr) Maryland Massachusetts New Jersey Vermont [/edit] BlueT. Message edited by: BlueTDimly on 01/17/2002 14:32:46 Date Posted: Jan/17/2002 2:48 PM Posted By: slackstate Rank: Member > Yupod, You’re credit rating should improve if you close out some of the cards you dont use. I read this awhile back in a book on credit cards at the library when I was trying to repair my bad credit Dinged a late payment when those bastards at MBNA didnt recieve my payment in the mail (plus I was not in the country and I didnt even know of this event) – so I was 1.5 months late. They immediately sent to collections those guys are quick! Since then I’ve been looking/reading things on how to fix up some bad credit. Deliquent payments will be removed from your credit report 2 years from the time it happene if anyone was curious. Aslo if this hasn’t been mentioned having a $1000 debt with a $2000 creditline is WORSE than having a $4000 debt with a $25,000 credit line. Besides you can always request to raise your CREDIT limit to get rid of your other cards, thats quite a few to keep track of. (I only have a few and know the card# and exp off top of head– guess makes it easy to buy stuff online even if I dont have my card or faster when contacting them you’ve lost your card. (esp when the system asks “PLEASE ENTER YOUR CC#” that really annoys me!!! Message edited by: slackstate on 01/17/2002 14:52:02 Date Posted: Jan/19/2002 6:51 PM Posted By: OzzyBurger Rank: Senior Member A negative payment history will stay on your report 7 years, more (up to 10) for bankruptcies, taxes, etc. Ozzy. Date Posted: Jan/20/2002 4:22 AM Posted By: loggia Rank: Senior Member 4K > My favorite. Having to prove a negative, i.e. you did not live somewhere. It is basically impossible to do so. In your case, though, you clearly did not live in a shopping mall. Have you spoken with a supervisor at the credit agency? Despite what they tell you (read: lie) the CRAs do have the ability to go beyond simply parroting what creditors tell them. They are responsible for reporting accurate information under the FCRA (Fair Credit Reporting Act). Example: I once had a similar ongoing battle about a credit card account listed on my report. It was not mine. They would not believe me. They communicated several times with the credit card company which “verified” the data. Finally, in utter frustration, I pointed out that according to the data I opened the account when I was 11-years-old. They then deleted it. They never explained how they supposedly investigated and verified the information that was never correct. The explanation is that the investigations they do consist of the following: “Hey creditor, is this correct?” “Yes.” Date Posted: Jan/24/2002 1:26 PM Posted By: NewGuy Rank: Senior Member 2K I just went through eLoan.com and my credit score is 721. That’s good, right? Just a week ago, I got denied credit when I tried to sign up for a phone with Verizon. They wanted me to make a $400 deposit. I don’t get it. Message edited by: NewGuy on 01/24/2002 13:40:31 Date Posted: Jan/24/2002 3:39 PM Posted By: loggia Rank: Senior Member 4K Verizon has to legally tell you why they denied you. You should receive a letter saying what credit bureau they used. They may have used Equifax, for example, which may have no data on you at all. A credit score typically combines all three credit bureaus. After looking into this, you can ask Verizon to check a different credit bureau which has more information. If Verizon does not care to make the effort, you can ask the credit bureau Verizon uses to add the data from your other credit reports. I think they have to do that if you ask (check with the FTC at 877-FTC-HELP). Date Posted: Jan/24/2002 6:19 PM Posted By: NewGuy Rank: Senior Member 2K Thank you very much loggia! I wrote them a letter asking which credit bureaus they used and why I was denied. Date Posted: Feb/20/2002 12:58 AM Posted By: NewGuy Rank: Senior Member 2K Here are some more credit tips from the FTC: http://www.ftc.gov/opa/predawn/F85/credittips.htm Date Posted: Feb/20/2002 9:48 AM Posted By: goofygrin Rank: Senior Member Phone companies suck. Right after I bought my house, AT&T wanted a $400 deposit for a phone line for me too. I mean… I can buy a $250k house, but I can’t get a damn phone line (I have perfect credit)? Like SIS, I have a couple things on my credit report from my parents. I supposedly got an Amex when I was 6. I/my father have repeatedly contacted the credit agencies, and it always shows up. Just like Insurance, credit reporting is a scam. (just my 2 cents) Date Posted: Feb/20/2002 9:54 AM Posted By: AlexTheMan Rank: Senior Member 1K Newguy.. e-loan generally gets the score from TransUnion.. However, your credit profile might be different with Equifax or Experian which would rsults in completely different score.. My wife has a 835 score with TU and a 690 score with EQ |
| Thread Title: Buying a home and dont want to pay points or lender fees?? READ THIS, and make a few thousand $$$ too! Date Posted: Oct/18/2001 2:01 AM Posted By: SUCKISSTAPLES Rank: FW Historian In the Fleet/Netbank refinancing thread, DMAN asked a question about using the (ultra-low 5.25%) Netbank Home Equity Loan (HEL) as a PURCHASE loan…thereby saving all those ridiculous “closing costs” and points…. While it is “normally” not possible to use a HEL as a purchase loan, I wouldnt be satisfied if I couldnt find some way around that. I’ve screwed Staples over for years and it was time for me to screw over the lending industry. Well I did, and I found a way to make a few thousand dollars to boot! It certainly IS POSSIBLE if you are creative and do a little extra work ….Heres 4 possible ways how to do it: 1. If you already own a home with lots of equity, you simply take out the HEL on that house, and use the $$ to buy the new house. Really simple. 2. Have nice parents (relatives, etc). with a house w/lots of equity willing to help you out? Have THEM take the HEL out on THEIR house, and use the $$$ to pay for your house. If you want to pay them back immediately instead of making their payment for them, you can then take a HEL out on your new house (which you paid for in cash) to pay them back. You just saved paying all closing costs, points, and got the LOW 5.25% NETBANK RATE!! 3. Assuming you dont yet own a house, or dont have others to help you, or even want to MAKE MONEY BY TAKING IT FROM THE LENDERS, here is the way to do it and avoid all those stupid “fees” lenders charge for mortgages: Either A. find a mortgage lender that offers “no cost” mortgages . These places charge higher rates…dont worry. Make SURE they dont simply add the closing costs to the mortgage principal amount, but rather just charge a Higher APR and truly no fees and points…also MAKE SURE there is no prepayment penalty. GET this mortgage, move in for a month or so, then apply for the Netbank HEL! Explain you will be using their HEL to payoff the mortgage as descibed in the HEL thread…BOOM! You just got into your new house without paying fees, points, and closing costs, and you got the low Netbank rate! Really easy. Two places I know of that have “no cost mortgages” are http://www.frmtg.com/nocost.lasso and http://www.chevychasebank.com (I dont know if they advertise it but I know they offer the “no cost loan”) DONT FORGET you MUST check on their prepayment penalties. B. (MY FAVORITE, WHERE YOU GET FREE MONEY FROM THE LENDER!) If you dont use a “no-cost” loan, there are lenders that offer “rebate points” which can be used to offset all the closing costs. I just did this. Just as you can pay 2 or 3 points (2 or 3%) upfront to LOWER the interest rate, ask if your lender offers “rebate points”, where you can get 2-3 points REFUNDED TO YOU in exchange for taking a higher rate. (AGAIN MAKE SURE THERE IS NO PREPAYMENT PENALTY!!!) I took a 7.625% loan with 3.5% rebate points and no prepayment penalty. The 3.5% in “rebate points” more than paid for ALL the closing costs, property insurance, etc…and actually lowered the LOAN principal by a few thousand dollars. Then I applied at netbank to payoff the “Rebate point” high rate mortgage. So I only had to pay the 7.625 mortgage for 2 months before it was paid off. Now have the low Netbank rate PLUS I MADE A FEW THOUSAND DOLLARS. And didnt pay the lenders a penny. The bank I got the “rebate point” mortgage was from Cal FEd http://www.calfed.com This may seem a little complicated, but it works…if you are willing to go through the trouble you can save $5,000-10,000 or more when buying a home, and end up with the LOWEST rate on the market. You’ll pay no points, no closing costs, no fees, and may actually make money! This is a Really Cool Way to make LOTS of free money… Message edited by: SUCKISSTAPLES on 10/18/2001 02:14:11 Date Posted: Oct/18/2001 9:26 AM Posted By: dman6666 Rank: Happy Member Thanks for the tips. It certainly looks like it’s possible, now I guess I have to decide if it’s worth the risks. Option A is out, we’ve already sold our first home and are living in an Apt. while waiting for the new house to be built. Also, it’s more than double the price our old home sold for, so, I don’t think that would have worked anyway. Option B would be OK but my parents don’t have enough equity in their homes to pay off ours. Plus, it’d be on their credit so if I couldn’t make payments it’d screw them. So, that’s out. [EDIT] Actually, your part2 of this is to take out a HEL on your house to pay back the parents… I have a feeling the banks would look into who the owner of the home is (your parents) and have trouble lending you money to pay them back??? [/edit] Option C&D Are both viable, but, I believe the risk is not getting approved for the NetBank loan and/or not getting it at the rate you hoped for. Thus, you’d have to either refinance with another bank and pay closing costs again, or, get stuck making higher payments for a while. —– The HEL is starting to look like a good, cheap, way to become a landlord though. There are plenty of drawbacks to being a landlord–I won’t get into that. Message edited by: dman6666 on 10/18/2001 09:32:25 Date Posted: Oct/18/2001 5:07 PM Posted By: SUCKISSTAPLES Rank: FW Historian Yes its definitely possible, I did it and anyone else can too. Dont forget on option 2 (where relatives take out a HEL on their homne and give you the $$$), I think you are assuming your Relatives would then buy the new house….thats not what Im saying. Im saying to have them take the HEL out on their house and HAND YOU the check, so you can then buy your house in your name and pay all cash. Yes this option will only work for very close relationships who would feel comfortable doing this for you. YOU are then the owner of the newly-purchaed home, its fully paid for, and there is NOTHING on your credit report. Netbank would see this as a home YOU own. They wouldnt question (or even know about) the fact your relatives took out the HEL on another property for you to buy it. You can then choose to take out a Netbank HEL on your new property to payback your relatives immediately, or you can just make their payment for them, assuming again you have that kind of relationship where this would work. The last options (3A and B) are the options you can do all by yourself, and without owning property previously. DMAN pointed out the just about the only risk – that you may not qualify for the Netbank loan and be “stuck” with a higher rate for a while…but that risk is small if you plan ahead and heres why: You can easily figure out your debt-income ratio before you do anything (divide total monthly income and monthly debt) Use calculators to figure out how much the Netbank HEL will cost you monthly. If your debt-income ratio is under 30%, you DO qualify for Netban’s lowest rate. As long as you are 40% or under, theres really little reason you wouldnt qualify…. If you took out say a $100,000 “no-fee” 30 year loan at 7.5% , Your monthly payment is only about $100 less than a 15 year 5.25% Netbank HEL. Thus, there will be very little difference in debt-income ratio. Additionally, since Netbank will know you are paying off your high rate mortgage with a HEL, they will actually be more EAGER to lend you the money on this type of “refi”, since ANOTHER bank already assessed you were a “good enough risk” to lend you that money, so why shouldnt Netbank, so THEY can get the interest instead of your other lender? Message edited by: SUCKISSTAPLES on 10/19/2001 02:12:13 Date Posted: Oct/18/2001 10:16 PM Posted By: SanvenK Rank: New Member Thanks SUCKISSTAPLES, I’m goint to do the plan 3B. Can you have a step by step for more detail? for example, How can I apply the loan from calfed? “…I took a 7.625% loan with 3.5% rebate points and no prepayment penalty. The 3.5% in “rebate points” more than paid for ALL the closing costs, property insurance, etc……” I check http://www.calfed.com but couldn’t find the 3.5 rebate as you say. Besides, is this nationwide? I live in MD. Date Posted: Oct/18/2001 10:44 PM Posted By: SUCKISSTAPLES Rank: FW Historian I basically gave the step by step right there. You gotta get on the phone and in the bank branches for this one…I cant do it all for you….the place you get the 1st mortgage from will be different for everybody depending on where they live and what bank they choose…..local major banks are a good place to start. CalFed happens to be local and covenient to me, you can do this at any bank in your area that offers rebate point loans…call them and ask! Visit the banks instead of trying to find it online…you wont find the detailed loan tables with big point spreads online like a loan officer can show you….so for this one you need to get into the branches and deal with the lenders…so you gotta do some legwork. Get down to the local banks and see what they offer…you want to find a loan with a big “rebate point” which will pay for all the closing costs and uses the excess to reduce the principal, and NO preparyment penalty. Make sure they dont simply “roll” the closing costs into a larger loan amount. Now get out there and start screwing some lenders! Message edited by: SUCKISSTAPLES on 10/18/2001 22:51:16 Date Posted: Oct/19/2001 9:54 AM Posted By: Grinch Rank: Ancient Member Hmm…Anybody have an idea how many times you can refinance your mortgage with negative points before the banks will stop underwriting new ones for you? Because if they will give it to you, why not just keep flipping your mortgage over and over for high-rate, high-rebate mortgages from a different bank every month? There is, however, the risk that eventually nobody (including netbank) will underwrite a new mortgage for you, and you’ll be stuck at the ultra-high rate. Would each previous mortgage show on your credit report as a separate item with zero balance? I know this is what happens to credit cards; it takes years to drop off even if you’ve closed the account. OTOH, most of the rebate mortgages I’ve seen will only rebate “up to” the closing costs. I haven’t found any yet that will just fork over cold, hard cash when they can be closed out the next day… Date Posted: Oct/19/2001 11:41 AM Posted By: MaxMojo Rank: Addicted Member Just called them, the current rate is 6.74%, or 6.49% if you have auto-payment from a fleet checking acct. I was hoping to re-fi investment properties, but unfortunately for me they only loan on owner-occupied properties. But I am in ther mkt for my own place and the “get a so-so all inclusive, no prepay penalty, loan and then buy it out with a fleet loan (option 3B)” might be a way to go. The main risk with that is the possibility that Fleet will make changes in the program and the possibility that you might then be stuck with the original loan. Message edited by: MaxMojo on 10/19/2001 11:44:44 Date Posted: Oct/19/2001 12:13 PM Posted By: Aurianne Rank: Happy Member Ok I’m just about ready to do the netbank deal but I have one question. Do they do an appraisal & do I have to pay that fee? Date Posted: Oct/19/2001 1:08 PM Posted By: MaxMojo Rank: Addicted Member They told me there would be no appraisal fees. But on a deal this significant you really need to call them yourself and do your due diligence. Ask the tough questions and ask a lot of ’em. Date Posted: Oct/19/2001 1:25 PM Posted By: Aurianne Rank: Happy Member Thanks MaxMojo! I just applied for the loan. If this works out it’ll be so great. With the difference in payment amount I’ll cut my loan down from a 30 yr loan to 15 then put the difference right back into double payments & have the house paid in full in 7 years at the latest! Wow they’re quick! They already approved it pending proof of income & appraisal! Super quick & painless! Message edited by: Aurianne on 10/19/2001 19:39:02 Date Posted: Oct/19/2001 8:01 PM Posted By: SUCKISSTAPLES Rank: FW Historian AURIANNE: Netbanks does the appraisal free, only if you want a copy of it you pay them $10 but you dont have to get it if you dont want to Grinch, you are exactly right: “why not just keep flipping your mortgage over and over for high-rate, high-rebate mortgages from a different bank every month? There is, however, the risk that eventually nobody (including netbank) will underwrite a new mortgage for you, and you’ll be stuck at the ultra-high rate” You are 100% correct, IN THEORY you can keep flipping the mortgage, making a few thousand $$ each time. I even thought about this as a steady source of income! Of course it will likely catch up with you after 3 or 4 flips….the lenders will see something “fishy”, even if they are not smart enough to figure out exactly what, and refuse to do it. Personally, I would advise just using this technique to PURCHASE the home upfront so you are able to switch to a low rate Netbank/Fleet equity loan for a nice long fixed term. But theres no stopping you if you want to try the multi-rebate trick! You will need to find a number of lenders who offer high rebate loans, I am assuming since Cal Fed offers these, other banks do too, but it may be that the rebate points at other banks will only cover closing costs instead of reducing principal, which would make re-flipping useless. My concern is exactly yours: that it will be difficult to finally “lock” that Netbank equity loan if you flip it too many times, which is your ultimate goal… Yes all mortgages, even when paid off, show up on your credit report AND on the home’s title. Thats yet another factor which would make “frequent flipping” every month or so extremely difficult – the lenders will run a title check and see all these mortgages….and lenders are notoriously slow to record a mortgage satisfaction showing its paid off..and you want to lock in that low Netbank rate within the next few months! Message edited by: SUCKISSTAPLES on 10/19/2001 22:51:11 Date Posted: Oct/25/2001 1:45 AM Posted By: budddddylee Rank: Member ok i just joined up with fatwallet yadda yadda yadda. so far so good i like the freakshow hehe on saving some coinage. on the serious side my girlfriend wants to refi really really bad. i mean she/we talk about it lots. she has a first 30 yr fix of 162k 8.125% payment of $1463 and a second of 15k 9.625% payment of $132 and a 3rd borrowed off her 401k of 24k at 6.25% payment of $220 loan total= 200k and total payments for each month of all 3 loans is $1815 her house should be worth 240k easy and she doesn’t currently pay PMI. her parents own a 240-280k paid for no loans exist. from what i take this is the plan 1- have parent take HEL(home equity line for 250k) 2-parents give 250k to my girl who pays off 3 loans and then does same only to give 250k back to parents. (how long should/will this take?????? netbank or whatever she has great(A) credit) 3- think thats it. what about the 60 days this takes to happen. parents will incur a bill or 2 on their 250k hel loan right? more info she lives in CA! 92104 she will sell in 2-3 automatic for sure absolutely!!! an adjustable is being considered also!! -when we talk about the refi before i heard all this SUCKISSTAPLES smack (big props to u suckisstaples you are allstar material here on FW) my girl is most interested in paying back her 401k and consolidating her 3 loans into 1 with a possibility of a smaller or equal payment. so this very well could be a no brainer. as far as my experience goes i thought i had a equity line of credit and i thought it was like a credit card loan that never payed off the principal. i was only paying off interest. therefore it was a bad deal if i kept it over time and so i ended up doing a 2nd to get rid of a 30k hel. SO IS THIS THE SAME? is this a no brainer??? gotta go look forward to some comments tomorrow. a 250k at 5.25% has 1130$ instead of 1815$ thats a big ole savings. help me be the superman here with some feedback. wooohoo let me know what info is needed i am ready to take the plunge! Date Posted: Oct/25/2001 11:20 AM Posted By: pofig37 Rank: Senior Member > One thing that hasn’t been mentioned so far is a gift tax. Generally, it is not that easy to give 250k to someone without getting IRS involved. Date Posted: Oct/26/2001 2:19 AM Posted By: SUCKISSTAPLES Rank: FW Historian no gift tax is involved since this isnt a gift, its a loan…parents take out the HEL, then loan it to the kid (they must repay), the kid gets an HEL to payback the parents…NO GIFT. Buddy Lee, are you Asia Carrera’s exHusband?? =) Anyway, $250k @5.25% is NOT $1100, its more like $2300 b.c Netbank is 15 YEARS NOT 30 YEARS. So you will likely have larger payments, just paid off quicker…This isnt a deal to lower your payments… This topic is how to BUY a house and get the low Netbank rates, since your gf already has a house, all she needs to do is apply at Netbank to get a new HEL to payoff all her debt. You are also confusing a Home Equity Line of Credit (HELOC) with a Home Equity Loan (HEL). Sound similar- big difference. HELOC is just as you described (pay interest only, blah blah). HEL is fixed rate and payoff just like a mortgage, principal & interest every month till balance is 0 at the end. Read my first few posts in this thread: http://www.fatwallet.com/forums/forum.php?catid=18&threadid=53218 Youll find a lot of answers on that thread as that thread is discussing refi’s, this thread is for new purchases…. Date Posted: Oct/26/2001 10:51 AM Posted By: pofig37 Rank: Senior Member > How does one make a loan to a family member while keeping IRS happy? Does one need a formal document? I just wanted people to be aware of possible issues. Here’s some relevant info. |
| Thread Title: MORTGAGE INSURANCE, and why you don’t have to pay it anymore! Date Posted: Oct/20/2001 2:32 AM Posted By: SUCKISSTAPLES Rank: FW Historian Again, another great issue stemming from the Fleet/Netbank refinancing deal. Some people may not be aware that they CAN CANCEL THEIR MORTGAGE INSURANCE on most mortgages once their loan amount is 80% or less than their home’s current value! Example, if you bought your home for $100,000 and put 0 down, you had to pay MI on your $100,000 loan. If you have been making payments so that you only owe $80k now, your loan is now Less than 80% of your home’s current value, and you can get rid of the mortgage insurance! Similarly, if your house APPRECIATED from $100,000 to $130,000, you can also drop MI, even if you havent started reducing the principal much and still owe 99k of the $100k original loan…. Mortgage insurance is a complete waste of money that protects the LENDER, and its in your best interest to get rid of it as soon as possible. YOU DONT HAVE TO KEEP PAYING MORTGAGE INSURANCE!!! Now how you go about dropping MI will differ for each lender. The first step is to CALL YOUR LENDER, explain that your loan is now less than 80% of your home’s value and you wish to cancel MI. They may respond in the following ways: 1. They may do an electronic check of home values in your area, and your cuurent loan balance, and if they see you are right, they might just drop it for you, simple as that. (but we all know things in life arent so simple)/// 2. If the loan amount is still close to 80% of the homes value, they may say they would need an APPRAISAL proving your home’s worth before dropping MI. They may require you to use their appraiser. Its usually worth the $200-400 appraisal fee to get MI removed. If you are choosing the appraiser, make sure you let them know AHEAD of time what kind of numbers you need to show, and choose another appraiser if that one doesnt seem willing to work with you…. 3. If they refuse to drop MI, find out exactly why…for some loans, it is MANDATORY that MI be dropped…for others, MI lasts the life of the loan… 4. Lastly, And possibly the BEST option for many people, is to simply say SCREW YOUR LENDER if they give you any hassle about dropping MI, and apply for one of the super low fixed rate Home Equity Loans discussed in other threads. You might want to mention to an uncooperative lender how , with todays low rates, you could save money by refinancing and taking your loan elsewhere, but you would rather your current lender simply drop your MI and keep you as a customer…that should give them some incentive to keep you. Whichever route you choose, you will never have to pay mortgage insurance again, and will likely get a better rate if you choose to refi! Keep in mind I am not an expert on MI, as I have fortunately never personally used it. I just wanted to let people know that they can get rid of MI for those who didnt know they could..for the loan experts, if you can point to links and resources on dropping MI, that would be good. Message edited by: SUCKISSTAPLES on 10/20/2001 05:03:00 Date Posted: Oct/20/2001 4:51 AM Posted By: bssc Rank: Senior Member 10K We dropped our MI about a year ago. The lender required an appraisal which cost us $300 or so. However, that got paid back in 4 months since we no longer had to pay the $90 a month mortgage insurance. However, we decided to keep paying the same amount since the $90 would now go towards the principal. Date Posted: Oct/20/2001 2:21 PM Posted By: FatWallet.Com Rank: Chief Mucky Muck When we purchased our house back in june, the lender did what they called a 75/15 – we had 10% down They did 75% of the value as the first mortgage and 15% as the second mortgage. The second mortgage was at a bit higher interest, but it kept the PMI out of the picture, and all the intrest was deductable. It was a Win/Win. Date Posted: Oct/20/2001 9:33 PM Posted By: kxl19 Rank: Senior Member Yes, doing the second mortgage is well worth it, rather than paying MI. I recently bought a place, and did not have enough for 20% down. So, instead of paying PMI, I got a 2nd mortgage when added to my down payment, was 20%. Better yet, the interest on the 2nd mortgage is tax deductable, but PMI is not. |
| Thread Title: The FatwalletFinance forum Employment Thread: Post your companys’ job openings here!! Or find a great new job! Date Posted: Oct/24/2001 2:04 AM Posted By: SUCKISSTAPLES Rank: FW Historian Speaking of Finances and how to keep that Fatwallet fat, I think a job opening thread would be great in this forum! I have seen several FW’s mention that they are earning $50-100k their first year out of college, and no doubt a lot of us would like to score a similar killer job. Do YOU know of any great job openings?? Well this is the place to post it! Feel free to post all positions, whether they be entry-level, degree level, or experienced positions, in all fields…. This is a win-win situation which benefits everyone here, b/c if you already have a great job, your company may offer you a BONUS for recruiting new people. Keep in mind the crowd that reads Fatwallet Finance is a very educated and intelligent crowd, and are probably well-qualified for the positions which may be available! You’ll no doubt find some of the nation’s best and brightest talent right here in this forum! If you have a great job, or know of a great opening, post the following details: The company name and location The position and brief duties The salary and benefits (try to be more specific than DOE) The requirements (college degree, experience, etc) WHO TO CONTACT: Remember, if you are an employee at a company, you often get paid a HIRING BONUS if you recruit new talent! For those people, you may just include your email so people can contact you about the position, otherwise the hiring # or email would be useful. For ease of reading, lets try to keep this thread FREE OF COMMENTARY AND STICK ONLY TO REPLYING WITH JOB POSTINGS…if a position is no longer available, the author should edit her/his post to reflect that. NOW POST THOSE OPPORTUNITIES!!!! Message edited by: SUCKISSTAPLES on 10/24/2001 02:15:13 Date Posted: Oct/28/2001 3:22 PM Posted By: HP3000 Rank: New Member deleted (appears no interest). Message edited by: HP3000 on 11/02/2001 20:45:41 Date Posted: Oct/28/2001 4:26 PM Posted By: evanm Rank: Ancient Member I may have some people interested who have both hp3000 and hp9000 experience… Where should they e-mail their resumes? Date Posted: Oct/29/2001 6:24 AM Posted By: HP3000 Rank: New Member Deleted (appears no interest) Message edited by: HP3000 on 11/02/2001 20:46:45 |
| Thread Title: QUESTION FOR TAX EXPERTS – business vehicle deduction (over 6000lbs) Date Posted: Nov/15/2001 9:08 PM Posted By: SUCKISSTAPLES Rank: FW Historian There was a cmment by YURGREAT in http://www.fatwallet.com/forums/forum.php?start=60&catid=18&threadid=51762 which suggests that if you buy a truck which has a weight of over 6000lbs, used 100% for business, you are entitled to a HUGE DEDUCTION IN THE FIRST YEAR YOU PURCHASE THE VEHICLE. Yurgreat mentioned 80% of the purchase price. Is this true? It doesnt seem to account for mileage, depreciation, etc. I did some internet searching and found some info which stated not only trucks over 6000lbs, but trucks and vans which exceed 6000lbs including passengers are treated differently by the IRS. If you add 7 or 8 passengers, such as fit in most full size vans and SUVS, it appears all these vehicles qualify. Here are the sites I found: http://www.taxtoolbox.com/reports/6000pound.pdf and http://www.legaltaxloopholes.com/true_stories/index.cfm This seems too good to be true! They mention something about a $24,000 cap deduction….they dont mention the 80% figure…can anyone enlighten us?? I cant see how you can deduct 80% of the total purchase price in the first year, and not factor in mileage, depreciation, etc…. Even if you pay for the car 100% cash and forget the payment thing. Example: buy 2002 Chevy Suburban for $30,000 in December 2001, then take a $24,000 (80%) deduction on your 2001 taxes. No figuring out mileage, expenses, etc. Even if you only drive it 100 miles (and make ALL those miles “business miles”!). Could you buy a $24,000 SUV and deduct 100%%? Is this correct???????? Then could you convert it to your personal car in Janaury 2002, or sell it for almost what you paid for it, without any tax complications? Then could you BUY ANOTHER ONE In 2002 and get the $24,000 deduction again??! Message edited by: SUCKISSTAPLES on 11/15/2001 21:23:40 Date Posted: Nov/15/2001 10:56 PM Posted By: Raiz Rank: Ancient Member Heh, really lookin for a way to work the system eh staples? /me wanders off to look at new trucks and waits for the experts to answer this question. Date Posted: Nov/16/2001 1:54 AM Posted By: SUCKISSTAPLES Rank: FW Historian Ive been checking on Carpoint and looks like eligble trucks/SUV’s include: All Full size Chevy/GM/Dodge/Ford trucks (1500, ram, f150) All Full Size Chevy/GM / Caddy/Dodge SUVS (suburban, tahoe, escalade, expedition , navigator, durango, availance, denali, excursion) 4 door versions ONLY of Dodge Dakota pickup AWD version Chevy Astro van Vehicles that do NOT appear to qualify are: chrsyler minivans Ford Explorer/Mercury Mountaineer chevy s-10, blazer, olds bravada import minivans Date Posted: Nov/16/2001 12:45 PM Posted By: guppy Rank: Senior Member If a car is over 6000 pounds, unloaded gross vehicle weight, or a truck or van over 6000 pounds, loaded vehicle weight, then “listed property” limitations do not apply and depreciation is done under normal rules. This means you can take a section 179 deduction in the year of purchase up to a maximun of $24,000 (for all assets acquired in the year). The balance of the purchase cost is depreciated under MACRS rules. For example, buy truck for $40,000; 100% business use, can deduct $24,000 sec 179 + depreciation of balance 3200. If business use declines from 100% in following years the sec. 179 deduction is “recaptured” (added to income), so that the allowed deductions is no more than what would have been allowed using regular MACRS. In other words, you can buy vehicle in Dec. and write off $27,200. But if business use in 2002 is 0, it will be recaptured. Operating expenses deducted in addition to depreciation. 80%? no idea what referring to. Date Posted: Nov/16/2001 1:08 PM Posted By: yurgreat Rank: Senior Member 3K i was in a tax class sponsored by the SBA. there was a IRS rep and a cpa there. the cpa said that the irs DOESNT allow 100% tax deduction for a vehicle, even if u have 2 cars and claim to drive 1 only for business. the irs rep confirmed that. so he started saying 80% tax deduction for the business vehicle. i’m assuming that 80% is the acceptable standard used by the irs??? edit: Guppy, u mean i can buy a $30k truck, deduct 24k from it (80%), then sell the next year, and start churning again? what if you financed the car for 60 months? can you still deduct the full 24k? and what if you sell the financed car the next year? Message edited by: yurgreat on 11/16/2001 13:10:59 Date Posted: Nov/16/2001 3:45 PM Posted By: SUCKISSTAPLES Rank: FW Historian Ok, so it looks like you can write off at least $24,000 THIS YEAR if you buy a truck in December…the parts I (and I think YURGREAT) is concerned about is this: “If business use declines from 100% in following years the sec. 179 deduction is “recaptured” (added to income), “ From what I read on those other boards, it seemed like the Depreciation would be recaptured if business use dropped from previous year, but not the $24,000 deduction… EXAMPLE: We buy the $30k truck in dec 2001, take the $24,000 deduction…can we then SELL the truck in Jan 2002? Our “business use” % wont change, we will just have gotten rid of it….do we have to “pay back” that $24,000?? And can we then buy another truck in 2002 and take another $24k deduction? It does seem like a great way to get a deduction without actuaolly havign to spend the money that year(the deduction will more than cover the truck payments!) Date Posted: Nov/16/2001 4:07 PM Posted By: guppy Rank: Senior Member When you sell the truck, your business use drops to 0%; = recapture. Even if it wasn’t, you would have a profit on the sale (30,000 cost less $24,000 = “basis”) sale price less basis = taxable gain. Remember, this is only availible if used for “business”. Section 179 deduction is depreciation; taken in advance, but is recaptured (paid back) the excess over what regular depreciation would have been. Date Posted: Nov/16/2001 5:19 PM Posted By: SUCKISSTAPLES Rank: FW Historian ok, so basically what you are saying is its difficult to take the 24k dpereciation deduction upfront them quickly dispose of the vehicle…how about ways around this, that meet the IRS rules? Example: buy $30,000 truck dec 2001, take $24k sec 179 deduction for 2001, use it for a year and then in dec 2002 sell it for $6k to friend. Basis = $6k, Sales price 6k= no gain. Then do it again , buying a new truck in Dec 2002. Seems like this would be good both for your business AND will make a lot of friends happy! (you will be their “discount truck” source!) Or how about donating it to charity? Example: buy same $30k truck, take sec 179 $24k deduction, use it for the year then donate it to charity…wpuld you only be able to deduct a $6k charity donation (your basis) or a approx. $25k donation (fair market value at end of year)? Date Posted: Nov/16/2001 8:01 PM Posted By: guppy Rank: Senior Member If you purchase for $30,000, use 100% in business, and then sell for $6,000, then yes, you will get, in total, $24,000 deduction. But, that is the same as leasing the truck for $2,000 per month. (not a very good deal). If you are planning that your friend will give you money over & above the $6,000 sales price, will, that’s a whole different matter, ie. if you don’t get caught you can deduct anything, 20 dependants, gambling losses, etc. Donating to charity is limited to your basis. But then you will have “leased” the truck for $2,500/ mo. Date Posted: Nov/17/2001 10:56 AM Posted By: waterman Rank: Senior Member Suck, I believe you would pay taxes on any gain on the sale of the vehicle. 10k – Purchase price of truck 8k – Depreciation taken this year —— 2k Basis If you sell the truck for 8k in January, you have to pay taxes on the gain (8k sale – 2k basis) The only way this would be good deal is if you could offset different tax rates – say you have high taxes this year so you get a big chunk of the depreication back and then you have low taxes next year so you don’t have to pay much on the gain Date Posted: Nov/19/2001 2:07 AM Posted By: SUCKISSTAPLES Rank: FW Historian thanks for all the info…im trying to just find the legal ways to take advantage of this… Guppy, If i buy the truck for 30, take the 24k deduction, then sell to a friend for 6k, im not really paying $2k/month for a 1 year lease, as the $24k deduction is going to save me approx $8k this year, but I see what youre saying, its still going to “cost” me $16k. Its just going to take a little creativity…such as, after I sell it to my friend for $6k and he uses it a bit, I can then buy it back as a personal car from my friend and keep it and use it 100% for personal use….so I effectively am getting a $24k deduction on a PERSONAL car! Is that correct logic? Seems like a NICE easy way to save approx. an additional $8000 on a vehicle purchase! Date Posted: Nov/19/2001 11:30 AM Posted By: WalStMonkey Rank: Senior Member 1K Make sure to send us a postcard from Leavenworth. Date Posted: Nov/21/2001 12:48 AM Posted By: SUCKISSTAPLES Rank: FW Historian Ok that comment is way off base. Reading the rules, there is NOTHING illegal or impermissible about moving assets in this way. Perhaps you dont know that wealthy people take advantage of these “tricks” all the time, thats why they stay wealthy and the people who are scared to death stay broke. If you have legitimate facts, go ahead and post. This isnt a forum for IRS scardey-cats Date Posted: Nov/21/2001 7:37 AM Posted By: WalStMonkey Rank: Senior Member 1K What you’re suggesting is plain old fashioned fraud, so no, my comment was not off base. It has nothing to do with being a ‘scaredy cat’. Ponder the definition of the phrases ‘fair market value’, ‘arm’s length transaction’ and ‘straw man’. Don’t for a minute believe that it would be legal to sell a vehicle for that much under fair market value and keep the deduction without being able to prove that something extraordinary had occurred to cause it to be worth that amount. You could probably get away with blue book. It would still be fraud. |
| Thread Title: The NETBANK HEL SAVINGS THREAD; how many ,millions of dollars did we save??!!!! Date Posted: Dec/07/2001 6:45 AM Posted By: SUCKISSTAPLES Rank: FW Historian I thought it would be interesting to start a easy-to-read thread where everyone who took advantage of the awesome Netbank Home Equity Loan could post how much they saved by refinancing, and what their loan amount and final rate with Netbank are. Lets keep this thread neat and easy to read, and only include the following information: LOAN AMOUNT RATE AMOUNT SAVED I will start off the first post!!! Date Posted: Dec/07/2001 6:46 AM Posted By: SUCKISSTAPLES Rank: FW Historian $195,000 5.5% saved over $100,000 Date Posted: Dec/07/2001 7:23 AM Posted By: gAnjA Rank: Broke Member $150,000. 5.75% uhm… ~$110,000… Date Posted: Dec/07/2001 7:36 AM Posted By: dealsdyker Rank: Addicted Member Loan Amount 92000 Rate 5.25% Saved 16000 How about keeping track of the rate moving from? 6.7% Date Posted: Dec/07/2001 7:51 AM Posted By: rphmann Rank: Senior Member Got mine at Fleet: 150,000 5.49% 200,000 Message edited by: rphmann on 12/07/2001 07:51:57 Date Posted: Dec/07/2001 8:04 AM Posted By: drogers Rank: Member $195,000 5.75% $170,000 Date Posted: Dec/07/2001 8:04 AM Posted By: huesmann Rank: Member Applied for $162,500, got it at 5.5%. Would have shelled out a total of $243,772 in interest. Adding the $15,000 in interest I already had paid on the original mortgage to this NetBank loan, my total interest should be around $91,500, for a savings on interest of over $152,000. Date Posted: Dec/07/2001 8:25 AM Posted By: suline Rank: New Member Net Bank HEL Loan Amount: $140,000 Interest Rate: 5.5% Total Savings: $63,400 (oops!!! forgot to add closing cost savings) Message edited by: suline on 12/07/2001 08:29:15 Date Posted: Dec/07/2001 8:33 AM Posted By: JJordan Rank: Addicted Member $80,000 5.25% 10 Year Savings ? Not sure — I borrowed $59,000 to pay of first mortgage at 6.75 % with 7.5 years left (total to be paid was $77,400), $9000 to pay off second morgage at 7.75 % with 25 months left (total to be paid was $11,250) and $13,000 for real home improvements (new carpeting in the entire house, new kitchen tile floor and new kitchen counter tops). Total of prior payments to pay off same loans = $88,650. Total of payment to pay off new loan $102,960 ($14,000 more). BUT the new loan has $13,000 more principal, Subtract out the 13,000 on the new loan leaves payments of $89,960 which is only $1000 more than what I had to pay before. So, by my calculation, over 10 years, I pay $14,000 more, but borrowed $13,00 more so I am in effect getting the $13,000 for $1000 in total interest over 10 years which equates to 1.5 % BEFORE tax (.9 after). WHEW, like anyone really cared for that explanation Date Posted: Dec/07/2001 10:00 AM Posted By: keith Rank: Thrifty Member Netbank: $150,000 5.25% fixed 15 year How much saved? Not directly applicable, because my existing mortgage is just about already paid off, and the new loan is to finance construction of a new home. Still, a killer deal at 5.25% and apparently most loans over $100,000 got a 5.5% rate so this was a nice surprise to get 5.25%. When I first told my wife, she said something like ‘where’s the catch, can’t be legit, blablabla’. Now the money is in our bank, guess it was for real My brother in law, who was already about $400 down in fees towards a conventional refinance at 6.xx% said it wasn’t worth it to switch to Netbank lose the $400!!!! Some folks have no brains, that $400 saved probably cost him at least $10,000 in future losses. Dork! Told a few others about the 5.25% deal, and none took the bait. Their loss, some people get confused by large numbers, hehe. Keith. Date Posted: Dec/07/2001 12:22 PM Posted By: DaveHanson Rank: Senior Member 6K Netbank HEL, $99,000, 5.25, saved ? (had an adjustable that I was prepaying agressively, which makes comparisons difficult.) Date Posted: Dec/07/2001 12:43 PM Posted By: junkleo Rank: Ancient Member $179000 5.75% $14000 Date Posted: Dec/07/2001 1:12 PM Posted By: yurgreat Rank: Senior Member 3K Old loan: $135k, 6.75%, 30 year (Should have been 6.5%, but the day i locked in the rate, it jumped to 6.75). 25 years left. Netbank Loan: $126k, 5.5%, 15 year (was approved for 5.25% but…hm, i see a pattern here). 15 years left Saved: ? (will do the calc when i’m home) Edit: Saved $76k if i stayed 25 years. but if you add the opportunity cost of paying the higher morgage vs putting it in the stock market and getting a 10% avg rate of return in a 28% tax bracket, i save 33k over in 25 years in today’s dollars. but if i only stayed 15 years, then i save 48k. but w/the above opportunity costs, i only save $1311 in today’s dollars. WTF? if i stayed 14 years, i save $1868 if you include opportunity costs. if i stayed 7 years b4 selling the house (sell in 2008), i save $3792. (and if i stayed 16 years, i save 5.5k.) i understand why it jumps so much at 16 years since i would have paid off the 15 year loan. But why do i save less and less (taking into account opportunity costs) as i come closer to the 15 year mark?? i’m using citibank’s “Which loan is better” financial calculator. Message edited by: yurgreat on 12/09/2001 08:38:17 Date Posted: Dec/07/2001 1:23 PM Posted By: axolotls Rank: Ancient Member 6.00% (b/s credit reporting score *(#&$(*&*#!!!!) Will save over $120,000 in interest!! Papers come tomorrow to be signed and notarized. I made a few mistakes along the way that could have saved me an extra week or so on interest. I also encourage all the lurkers who also took advantage of this deal to post. Suck: Can’t wait to see the final tally. Date Posted: Dec/07/2001 1:46 PM Posted By: ayoop Rank: Member $125,000 5.75% saved ~ $70,000 (not exactly sure since it was part of a somewhat complicated home purchase instead of a normal refinance) P.S. I was one of the long time lurkers who joined because of the original Netbank thread. Thanks to all. Date Posted: Dec/07/2001 11:13 PM Posted By: ROFL Rank: Senior Member Netbank HELO: $200k @ 5.5% 15-yr fixed Original mortgage: $150.4k @ 6.375% 30-yr fixed, 3 years in I think I would have saved around $16k had I simply refinanced the remaining principal, but Netbank’s deal allowed me to pull out cheap equity to put 20% down on a second home. Looking forward to participating in Suck‘s rental property thread in the Finance forum… I’m gonna be a slum lord! Date Posted: Dec/08/2001 2:12 AM Posted By: kxl19 Rank: Senior Member LOAN AMOUNT: 125,000 RATE: 6.0% (I was > 80% LTV) AMOUNT SAVED: 60,000 Date Posted: Dec/08/2001 4:20 AM Posted By: single Rank: Happy Member Loan: $135k Rate: 5.5% Saved: $20k Date Posted: Dec/09/2001 12:38 AM Posted By: Zambonni Rank: Senior Member Netbank HEL 150,000 5.75% (approved at 5.5 – they switched me at last minute. Oh well.) Saved aprox. 130,000 Date Posted: Dec/10/2001 1:59 PM Posted By: fdiskboy Rank: Member Old loan : 106300 New loan : 119000 Old rate : 8.25 New rate : 5.5 Interest savings over the life of the loan: 125,000+ Date Posted: Dec/10/2001 5:53 PM Posted By: WalStMonkey Rank: Senior Member 1K But you could have re-fi’d to about 6% or so with another company, so it is totally inaccurate to say that you’ve saved that money by doing the Netbank re-fi. You saved 2 1/4% by doing the re-fi, and 1/2% because of the Netbank deal. Also, the increase in principal shouldn’t count a nickle toward saving. Date Posted: Dec/11/2001 10:22 AM Posted By: Lowcarb Rank: Member Old loan 208,000 @ 7.25% 30 years interest payments 301,639.18 Interest allready paid $53,110.99 interest yet to be paid $248528.19 New Loan 201,000 @ 5.50% 15 years interest payments 94,620.57 Interest savings over loan life = $150,907.62 My new payment will be $223.41/month more than my old loan do the the decreased life of the loan. I’ll now pay it off 12 years sooner. Lowcarb Date Posted: Dec/12/2001 9:24 PM Posted By: Skip Rank: Member Loan Amount 210,000 Rate 5.75% Saved $160,000 over the life of the loan (15 years) Thanks SS, FW and all other posters. Best deal I ever got into! Date Posted: Dec/14/2001 1:28 PM Posted By: fdiskboy Rank: Member “But you could have re-fi’d to about 6% or so with another company, so it is totally inaccurate to say that you’ve saved that money by doing the Netbank re-fi. You saved 2 1/4% by doing the re-fi, and 1/2% because of the Netbank deal. Also, the increase in principal shouldn’t count a nickle toward saving.” I don’t get your point, troll. The increase in principal didn’t count towards the savings, in fact it DECREASED the savings, because I figured the interest on the increase in principal as part of the total interest on the new loan. Tell you what, do the math, then get back with me. Also, keep in mind I did not do a refinance but a home equity loan, they are different animals. I did not even include my savings from having only $10 in fees. Now, you want to argue with me? I’m a CPA, what are your credentials? Date Posted: Dec/14/2001 6:33 PM Posted By: SUCKISSTAPLES Rank: FW Historian ok ok…lets not get off topic…lets keep this thread strictly to the rates we got and amount saved COMPARED TO YOUR OLD LOAN. Discussion of “opportunity cost”, what other rates you could have gotten, etc. is not the point. Looks like there are few new replies so I will add up a rough total and see what we got…. this is definitely Fatwallet’s HOTTEST DEAL EVER. Date Posted: Dec/14/2001 6:59 PM Posted By: WalStMonkey Rank: Senior Member 1K fdiskboy, I do not want to argue with you. If you want to give credit for saving all the money to Netbank for the savings even though you could have saved almost as much by going with an alternative provider more power to you. Old loan : 106300 New loan : 119000 Old rate : 8.25 New rate : 5.5 Interest savings over the life of the loan: 125,000+ Let’s see, on 106300 at 5.5% over 15 years you’ll pay $50,045.75 in interest according to Quicken. At 6% you’d pay $55,163.62. At 8.25% you’d pay 79,326.46. Where in the world do you get $125,000 in savings because of NetBank? You must have also shortened the term of the loan. You will save $5,117.87 because you chose Netbank. All other savings are due to the fact that you took out a new loan, and I assume shortened the term. You could have done this with another lender at the going rate of 6%. But wait, you say you didn’t re-fi? That means you still have your old loan, no? No, I’m not a CPA, and I don’t play one on the Internet. Message edited by: WalStMonkey on 12/14/2001 19:40:39 Date Posted: Dec/14/2001 10:49 PM Posted By: SUCKISSTAPLES Rank: FW Historian WSM…hes counting the reduction from 30 to 15 years (yes which we could have done at places other than Netbank for a slightly higher rate and closing costs…the best no closing cost rate was about 6.25% at the time) Please: …lets not get off topic… Date Posted: Dec/15/2001 4:56 PM Posted By: sub0cool Rank: Senior Member . Message edited by: sub0cool on 12/15/2001 16:57:06 Date Posted: Dec/16/2001 9:27 AM Posted By: FmrLCpl Rank: Senior Member WalStMonkey, Which bank offers 6%? Date Posted: Dec/16/2001 6:19 PM Posted By: ROFL Rank: Senior Member I think WSM has a point. It’s a little silly to claim hundreds of thousands of dollars in interest savings when you’re not paying the same amount per month to each loan. To be realistic with these savings numbers, folks really ought to be looking at the total interest payments on their original loans had they made pre-payments each month to bump up their monthly payments to equal the monthly payment they’re making on their new 15-year HELO. Seems reasonable to me. Date Posted: Dec/16/2001 8:35 PM Posted By: NumberSix Rank: New Member Loan amount:$92000.00 Rate:5.5% Intrest Saved:$90000.00 P.S. Closed 5 mos ago for 30 yrs… now 15 yrs for 130.00 a month more in payments Date Posted: Dec/16/2001 9:37 PM Posted By: SUCKISSTAPLES Rank: FW Historian THE GRAND SUBTOTAL::::::: (at least) $1,843,307 SAVED!!!!!!!!!! Of course there are many lurkers and people who chose not to post, so the grand total is EASILY OVER 2 MILLION DOLLARS SAVED!!!!!!!!! I think that makes this deal FATWALLET’s DEAL OF THE YEAR. To acknowledge the debate recently brought up, this thread is in no way an ACTUAL calculation of the EXACT amount saved, or which will be saved…this is simply an approximation over how much people saved by switching to Netbank over keeping their existing loans, IF they decide to keep this loan till maturity. There are simply too many variables which makes any exact savings figure IMPOSSIBLE to ascertain. YES, other banks offered similar low rates at the time, and people could have saved money almost ANYWHERE they chose to refinance at. Yes, theres an opportunity cost of putting the additional $$ to your mortgage each month instead of investing it. YES theres no way to predict how long each person here will KEEP their loan…you get the idea. Being that it is SO impossible to calculate all these variables, the easiest (and most relevant) comparison to be made was that of old loan cost vs. new loan cost over the remaining life of the loans, and that calculation has resulted in a documented savings of nearly (and likely greater than) 2 MILLION DOLLARS. COngratulations to everyone who got in on this one! Message edited by: SUCKISSTAPLES on 12/16/2001 21:40:24 Date Posted: Dec/17/2001 2:09 PM Posted By: Lowcarb Rank: Member Actually, I think WSMs point is wrong. I wouldn’t have refied to 15 years at 6% with another company when and had to pay 3-5K in closing costs. (Why netbank doesn’t want to bother recording this mortgage or are going to pay the mortgage recording tax themselves is beyond me. That puzzle almost kept me from taking the deal as a too good to be true deal. I kept looking for the catch, but other than their outrageous late fees (which can’t legally be collected in my state, I don’t plan on being late so I’m not going to sweat it) I couldn’t find it.) It was the totality of the deal, Low rate, no closing cost that made the deal for me. I wouldn’t have gone for a 15 year lone without this deal. Date Posted: Dec/17/2001 2:55 PM Posted By: ROFL Rank: Senior Member Lowcarb, WSM made a couple points. The one I was agreeing with is that add’l principal payments shouldn’t be considered when trying to claim savings from a shorter term loan compared to a longer term one. Think about this. Let’s consider a $100k loan amount. A 30 year fixed at 6% will cost you $215838 over the lifetime of the loan. A 15 year fixed at 6.25% will only cost you $154335.60. It’d be ludicrous though to claim this higher interest rate but shorter term loan saved you over 60 grand in interest. You could have just as easily made the same size payments towards your 30 year loan, and finish paying it off in less than 15 years. Unless people were refinancing from high interest rate 30-year loans, most of us were saving interest primarily from the shorter term (and hence larger principal payment per month). The interest savings a lot of the folks here are claiming, yourself included, are grossly exaggerated because of this fact. Let’s take your case. From your numbers, I’m guessing you’re about 4 years into your 30 year loan with $201k to go. If you keep this loan ’til you pay it off, you’ll be paying about $447164 over 26 years. But, if you pre-paid $223.41 each month (the difference between the 30 yr @7.25% and 15 yr @5.5% monthly loan payments), you’d only pay around $363219. With your NetBank HELO, you’ll be paying $295621 over the lifetime of the loan. Your savings due to the NetBank deal is really only around $68k, not the inflated $150k you claim, as you could have just as easily sat on your butt and pre-paid your current mortgage to match the higher monthly payment you’re making to your NetBank HELO. Last I checked, there are no closing costs associated with sitting on your butt. Date Posted: Dec/18/2001 7:36 AM Posted By: Lowcarb Rank: Member ROFL, I do agree with your “sitting on your butt” analysis. I do a lot of that. The only closing costs I’m encountered are the ones associated with a new wardrobe when the old zippers won’t close. So you and WSM are correct. I don’t think that anyone needs to worry to much about being correct though for this analysis. Date Posted: Dec/18/2001 12:18 PM Posted By: blockage Rank: Happy Member To stay on topic Original loan: 15 year conv 1st, $170k, 7.375%, 14 years remaining 15 year balloon 2nd, $21k, 9.75%, 14 years remaining with balloon of $17k at end of loan Total interest paid: $131k New loan: 15 year HEL, $186k, 6.00%, 15 years remaining Total interest paid: $96.5k Total Savings: $34.5k in interest payments, $180 per month increased cash flow Without a doubt, the best deal ever on FW. Thanks to all! Date Posted: Dec/30/2001 1:17 PM Posted By: TheGMan Rank: Charter Member Loan: 113,000 Rate: 5.75% Saved: 129,000+ Finally got my check & Mtg paid off 12/27. Special thanks to SIS and Dave. Thanks to all others for input, updates, and follow up as well! |
Fat Wallet Refugee 