The Finances and Debt Thread

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BMAN

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Does anyone know of a good budgeting template? Preferably for google docs? I attempted to use Mint, but I mostly use my credit cards to pay for things and then immediately pay them off. Mint doesn’t pick up on credit card transactions and I don’t like linking my bank accounts to them anyways.
 

BMAN

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So I started questioning what I’m paying for, and one of the things is my life insurance i have through American Income Life. Only reason I got something with them is because they said they work with my union. Im 28 and have had it for a few years now. But there’s always a new agent wanting to set up an appointment and always trying to sell a more expensive one. Now I don’t even know what the hell I’m paying for at this point. I’m thinking of cancelling and taking a big L and actually doing research. Anyone have some advice?
 

SanduskyCav

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Looking for a little financial advice: Mortgage Refinance / Student Loan.

I have a 30 year mortgage on my home loan with about 27 years left to pay on it, I owe $125,600 on a 4.25% interest rate and pay $950 a month with taxes and insurance included. My home was recently appraised at $198,000. I purchased it in a foreclosure and did some remodeling.

I consolidated my student loans from college a few years ago because the interest rates were extremely high as were the payments. I currently have a $322 payment per month with 13 years left to pay on them, still owing $28,000 as of today at a 7% variable interest rate.

I have a wife and 4 kids. One with medical issues so my wife doesn’t work, therefore all of our money comes from my paycheck. I make decent money so we get by, but would like to be able to begin putting money away for my kids college and more into our own savings.

What I’ve been wondering recently is, should I do a cash out refinance to pay these student loans off and roll the debt into my mortgage? I would estimate it’s going to add around $120-$130 to my mortgage monthly but I will save on some of the interest and have more disposable income to save.

I’m interested to hear any of your financial savvy posters recommendations.
 

Lee

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Looking for a little financial advice: Mortgage Refinance / Student Loan.

I have a 30 year mortgage on my home loan with about 27 years left to pay on it, I owe $125,600 on a 4.25% interest rate and pay $950 a month with taxes and insurance included. My home was recently appraised at $198,000. I purchased it in a foreclosure and did some remodeling.

I consolidated my student loans from college a few years ago because the interest rates were extremely high as were the payments. I currently have a $322 payment per month with 13 years left to pay on them, still owing $28,000 as of today at a 7% variable interest rate.

I have a wife and 4 kids. One with medical issues so my wife doesn’t work, therefore all of our money comes from my paycheck. I make decent money so we get by, but would like to be able to begin putting money away for my kids college and more into our own savings.

What I’ve been wondering recently is, should I do a cash out refinance to pay these student loans off and roll the debt into my mortgage? I would estimate it’s going to add around $120-$130 to my mortgage monthly but I will save on some of the interest and have more disposable income to save.

I’m interested to hear any of your financial savvy posters recommendations.
So cash out refi will get you lets say 30k cash at about the same rate, as a cash out loan is a bit higher rate and rates are up .375 since they hit bottom 2.5 weeks ago. (bottom this time around)

Personally I hate throwing student loan debt into your house. In fact, it is illegal for a loan officer to suggest it. (credit card, personal loan, car, etc all legal, but student debt already tax deductible, etc).

See if you can find a better rate on your student debt. How old are your kids? How old are you?

To me I would work on paying off the student loan debt on its own, not lumping it in with other debt. Also, you need to think of your own retirement, you want a paid off mortgage at retirement, and even if this isn't your retirement house, the more equity you have, the better chance you owe zero on the house. And the less you owe total, the more you can help with college as you go, so once again don't roll it into your house.

And to me the biggest gift you can give your kids is not to pay for college, but to not be a financial burden on your kids when you retire and they have a young family, once again the way to a healthy retirement is a paid off mortgage.

For so many reasons I wouldn't take out a mortgage to pay off the student loans.
 

SanduskyCav

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So cash out refi will get you lets say 30k cash at about the same rate, as a cash out loan is a bit higher rate and rates are up .375 since they hit bottom 2.5 weeks ago. (bottom this time around)

Personally I hate throwing student loan debt into your house. In fact, it is illegal for a loan officer to suggest it. (credit card, personal loan, car, etc all legal, but student debt already tax deductible, etc).

See if you can find a better rate on your student debt. How old are your kids? How old are you?

To me I would work on paying off the student loan debt on its own, not lumping it in with other debt. Also, you need to think of your own retirement, you want a paid off mortgage at retirement, and even if this isn't your retirement house, the more equity you have, the better chance you owe zero on the house. And the less you owe total, the more you can help with college as you go, so once again don't roll it into your house.

And to me the biggest gift you can give your kids is not to pay for college, but to not be a financial burden on your kids when you retire and they have a young family, once again the way to a healthy retirement is a paid off mortgage.

For so many reasons I wouldn't take out a mortgage to pay off the student loans.
Thanks for the input. I am putting away 6% of my income with at 6% company match in 401k and also have a pension from my employer so I believe, at least as of right now, I’m setting myself up okay for retirement.

My kids are all young, under 8, and I am 31. I’m just having trouble trying to pay anymore than what’s owed on the student loans, I throw $100 or so extra every once in a while on the principal when I have a little extra cash. But being single income I don’t have too much extra to spare monthly.
 

cavsfan1985

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Thanks for the input. I am putting away 6% of my income with at 6% company match in 401k and also have a pension from my employer so I believe, at least as of right now, I’m setting myself up okay for retirement.

My kids are all young, under 8, and I am 31. I’m just having trouble trying to pay anymore than what’s owed on the student loans, I throw $100 or so extra every once in a while on the principal when I have a little extra cash. But being single income I don’t have too much extra to spare monthly.
I would see if you could refi the student loans on there own. I would also ask yourself how long you plan to keep the house. If you think you are going to move in the next few years, depending on the cost it might make sense to roll into your house, as it saves you money now and then when you sell your home your basicly paying off your student loans with equity.

On the flip side, being the main provider for your family, increasing your mortgage can be risky, as you put your house at risk of foreclosure if you can’t pay for it. Atleast when separate you can just stop paying off student loans.
 

Lee

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Thanks for the input. I am putting away 6% of my income with at 6% company match in 401k and also have a pension from my employer so I believe, at least as of right now, I’m setting myself up okay for retirement.

My kids are all young, under 8, and I am 31. I’m just having trouble trying to pay anymore than what’s owed on the student loans, I throw $100 or so extra every once in a while on the principal when I have a little extra cash. But being single income I don’t have too much extra to spare monthly.

Doing math, you pay $322 a month and owe 28k at 7%, you have almost exactly 10 years to pay on your student loans. Math is math, at 13 years, your payment is $273, so your math is a bit off.

7% is high in my opinion, but i am not an expert on student loans.

Refinance the student loans to a better rate, putting it into your mortgage wont save you interest, it will cost you because you extended it out over 30 years and congratulations you now paying off your student loans while opening up new ones for your kids. Really seams beyond stupid when you think about it.

But if you pay $400 a month on your student loan, you pay it off in 7.4 years. Not sure what to cut out, drive older cars, eat at home more, etc. If you can refi the student loan to 4%, then the same $400 pays it off in 6.5 years.

Either way do not throw the debt into the house, you are just throwing bad money after good and fucking yourself on your house, keep the debt separate and dont buy another car until you have the student debt paid off is the best i can say without know more facts about your finances.

But going into to further debt so you can put more money into savings is counter intuitive. Pay off the student loans as fast as you can, refi them on thier own, 7% variable seems way to high to me.
 

Lee

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I would see if you could refi the student loans on there own. I would also ask yourself how long you plan to keep the house. If you think you are going to move in the next few years, depending on the cost it might make sense to roll into your house, as it saves you money now and then when you sell your home your basicly paying off your student loans with equity.

On the flip side, being the main provider for your family, increasing your mortgage can be risky, as you put your house at risk of foreclosure if you can’t pay for it. Atleast when separate you can just stop paying off student loans.
Pretty much agreed, it almost never makes sense to roll the student debt into the house though, just doesn't.

The one thing I forgot to ask is what type of mortgage does he have? If its a FHA loan, refi the house with no cash out to get rid of the mortgage insurance, but other than that, 4.25 is low enough on a small mortgage where a refi wont make enough of a difference.
 

SanduskyCav

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I would see if you could refi the student loans on there own. I would also ask yourself how long you plan to keep the house. If you think you are going to move in the next few years, depending on the cost it might make sense to roll into your house, as it saves you money now and then when you sell your home your basicly paying off your student loans with equity.

On the flip side, being the main provider for your family, increasing your mortgage can be risky, as you put your house at risk of foreclosure if you can’t pay for it. Atleast when separate you can just stop paying off student loans.
My wife and I are looking to move into a new house within the next 3 years.
 

SanduskyCav

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Pretty much agreed, it almost never makes sense to roll the student debt into the house though, just doesn't.

The one thing I forgot to ask is what type of mortgage does he have? If its a FHA loan, refi the house with no cash out to get rid of the mortgage insurance, but other than that, 4.25 is low enough on a small mortgage where a refi wont make enough of a difference.
It’s just a regular home loan, no FHA. Also I don’t have to pay mortgage insurance. When I mentioned insurance I was just speaking of my homeowners insurance.
 

Lee

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It’s just a regular home loan, no FHA. Also I don’t have to pay mortgage insurance. When I mentioned insurance I was just speaking of my homeowners insurance.
You are in good shape on the mortgage, maybe get 3.875 today on no cash out, 4.125 on cash out assuming 740 fico or higher, not worth it.

Just do something with the student loans, seems high. But why do you want to start saving for your kids college if you haven't even paid off your own college? I mean we all want the American dream, but your turning that American dream into an American nightmare by not paying off your debt first before earmarking savings for other things.
 

SanduskyCav

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You are in good shape on the mortgage, maybe get 3.875 today on no cash out, 4.125 on cash out assuming 740 fico or higher, not worth it.

Just do something with the student loans, seems high. But why do you want to start saving for your kids college if you haven't even paid off your own college? I mean we all want the American dream, but your turning that American dream into an American nightmare by not paying off your debt first before earmarking savings for other things.
Are you saying I should refinance my home
either way? My fico credit score is about 785.

The only reason I want to start saving for the kids now is because I don’t want to be saving for them too late.

Also, you are correct I have 10 years left on my student loans. Not sure why I thought it was 13.
 

Lee

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My wife and I are looking to move into a new house within the next 3 years.
When you sell your house, put 100% of the equity into a new home unless you have some credit card debt.

And why in 3 years, what is going to change about your financial situation where you think you can afford more house when you cant afford $400 in student loans? Not being an asshole, just making you ask the tough questions because unfortunately I make a real nice living because people are too stupid to do the right thing and follow my advice.

If people lived within their means and didn't call me back every 6 months to 2 years to pay off their debt and didn't listen to my advice on how to get debt free, I wouldn't make 200k a year.

Take my advice or make someone like me rich, those are your 2 options, really not trying to be an asshole, but I have hated my job for a few years because I don't feel like I truly help anyone, I just keep bailing the water out of their boats only to have them call back and bail it out again.
 

Lee

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Are you saying I should refinance my home
either way? My fico credit score is about 785.

The only reason I want to start saving for the kids now is because I don’t want to be saving for them too late.

Also, you are correct I have 10 years left on my student loans. Not sure why I thought it was 13.
I know what your are thinking, I have talked to thousands like you, I was asking you a tough question to try and get for you to see the stupidity of saving for college when you aren't done paying off college.
 

SanduskyCav

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When you sell your house, put 100% of the equity into a new home unless you have some credit card debt.

And why in 3 years, what is going to change about your financial situation where you think you can afford more house when you cant afford $400 in student loans? Not being an asshole, just making you ask the tough questions because unfortunately I make a real nice living because people are too stupid to do the right thing and follow my advice.

If people lived within their means and didn't call me back every 6 months to 2 years to pay off their debt and didn't listen to my advice on how to get debt free, I wouldn't make 200k a year.

Take my advice or make someone like me rich, those are your 2 options, really not trying to be an asshole, but I have hated my job for a few years because I don't feel like I truly help anyone, I just keep bailing the water out of their boats only to have them call back and bail it out again.
In 3 years her car will be paid off, $560/month. Our kids will be older and to the point where sharing a room isn’t possible once we get them larger beds and things. Like I said we get by, not having financial problems or anything, just wondered if rolling that student loan into my mortgage was worth it or not or would save me anything.

I make $120,000 a year so we aren’t struggling by any means.
 

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