HELOC or fixed for second mortgage.

[Raybyrnes]

I am missing something here. If you drive the car for 10 years why would it matter when you paid it off. Wouldn’t the most astute way of looking at it be Investment gains minus – interest paid. If I paid an additional 10000 in interest but earned 12000 by banking it wouldn’t it have lowered my cost of the car by 2K.

I think I know what you are saying. Most people don’t approach it this way and are more rechless with the way they spend but to the savvy person they can make out fairly well.

[Raybyrnes]

I am missing something here. If you drive the car for 10 years why would it matter when you paid it off. Wouldn’t the most astute way of looking at it be Investment gains minus – interest paid. If I paid an additional 10000 in interest but earned 12000 by banking it wouldn’t it have lowered my cost of the car by 2K.

I think I know what you are saying. Most people don’t approach it this way and are more rechless with the way they spend but to the savvy person they can make out fairly well.

[NotCranky]

Alex I posted this on another thread but it is working it’s way off. I mean to be helpful.
I read your remarks the other day on another thread and I have a recommendation for you. Create a new file in a manila folder or something like that. Call the file…”MY NEW HOUSE.” over time put things that interest you about your new house in that file..Forget about wether prices are going to go up down or whatever. Then make a mental note to yourself..
SELF. “I am putting this stuff into my “NEW HOUSE” File. I will not buy a house until I understand what I the hell I am talking about.” By that time hopefully the market will provide some chance of you succeeding. ALex it is very important to make a wise financial decision when you sign Mortgage documents. Time is on your side Alex. I have nothing against you Alex you need to listen (read and head)more. IMHO

[NotCranky]

Alex I posted this on another thread but it is working it’s way off. I mean to be helpful.
I read your remarks the other day on another thread and I have a recommendation for you. Create a new file in a manila folder or something like that. Call the file…”MY NEW HOUSE.” over time put things that interest you about your new house in that file..Forget about wether prices are going to go up down or whatever. Then make a mental note to yourself..
SELF. “I am putting this stuff into my “NEW HOUSE” File. I will not buy a house until I understand what I the hell I am talking about.” By that time hopefully the market will provide some chance of you succeeding. ALex it is very important to make a wise financial decision when you sign Mortgage documents. Time is on your side Alex. I have nothing against you Alex you need to listen (read and head)more. IMHO

[sdrealtor]

sdc
here’s an exapmle. Homeowner has 150K equity line with 100K balance. Homeowner refis into new eequity line product where the 100K is at a fixed rate and the unused 50K is still available at prime +/- whatever they qualify for.

Basically it allows someone with a heloc to have a fixed rate on the portion they have drawn while still preserving the right to draw the rest. I’m sure there are other uses but this is the obvious one to me.

[sdrealtor]

sdc
here’s an exapmle. Homeowner has 150K equity line with 100K balance. Homeowner refis into new eequity line product where the 100K is at a fixed rate and the unused 50K is still available at prime +/- whatever they qualify for.

Basically it allows someone with a heloc to have a fixed rate on the portion they have drawn while still preserving the right to draw the rest. I’m sure there are other uses but this is the obvious one to me.

[sdcellar]

sdr– Oh, I get the concept completely. It’s just totally foreign to me *why* I would want to get myself into such a debt position (especially in this undeniably uncertain market).

I struggle with things like 100% loans and sucking “equity” beyond that. Admittedly, this is perhaps a naive and even growth-limiting perspective in a booming market. But the alternative simply seems idiotic and perhaps even self-desctructive in a declining one.

[sdcellar]

sdr– Oh, I get the concept completely. It’s just totally foreign to me *why* I would want to get myself into such a debt position (especially in this undeniably uncertain market).

I struggle with things like 100% loans and sucking “equity” beyond that. Admittedly, this is perhaps a naive and even growth-limiting perspective in a booming market. But the alternative simply seems idiotic and perhaps even self-desctructive in a declining one.

[recordsclerk]

So if I can find a heloc for 7% and elect to put that money in a CD for 5% I would be making a profit. There seems to be something wrong with this. Can anyone explain this in more detail. Or did I just misunderstand the post.

[recordsclerk]

So if I can find a heloc for 7% and elect to put that money in a CD for 5% I would be making a profit. There seems to be something wrong with this. Can anyone explain this in more detail. Or did I just misunderstand the post.

[Raybyrnes]

You get the tax write off. So you are only paying .65*7=4.55
A 5% money market wouldn’t really make you money because you pay tax on this aswell but you would be a little more liquid and depending upon how you invest could make money.

[Raybyrnes]

You get the tax write off. So you are only paying .65*7=4.55
A 5% money market wouldn’t really make you money because you pay tax on this aswell but you would be a little more liquid and depending upon how you invest could make money.

[sdcellar]

Yes, if you’re in one of the highest tax brackets *and* you’re completely disciplined, you’ll be making interest margin on your money–key word being margin.

There’s gots to be better ways to make your money work for you…

But hey, maybe that’s just me. Anybody here (or anybody you know) effectively working the system this way?

[sdcellar]

Yes, if you’re in one of the highest tax brackets *and* you’re completely disciplined, you’ll be making interest margin on your money–key word being margin.

There’s gots to be better ways to make your money work for you…

But hey, maybe that’s just me. Anybody here (or anybody you know) effectively working the system this way?

[sdcellar]

Also, you point out the tax on earnings, but I think the math helps: 5%*.65 = 3.25%.

I can’t believe I let this go because we’re back to losing money with our bitchin’ HELOC. So, as you point out, I can’t really make money until my return on cash gets higher.

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