[cooperthedog]

One other thought: if you pay $80 for $100 worth of stock, 10% decline wipes out $10 of wealth. Your tax savings are someing like 10% *$20 = $2. $2 isn’t insignificant, but you take on a good amount of risk to save it.

This is not correct. A 10% decline wipes out 50% of your ESPP profit, so your tax savings are actually a loss.

In the scenario above (assuming 33% income tax rate vs. 15% cap gains), the breakeven point for flip vs. hold is a share price decline to ~$96.

[cooperthedog]

One other thought: if you pay $80 for $100 worth of stock, 10% decline wipes out $10 of wealth. Your tax savings are someing like 10% *$20 = $2. $2 isn’t insignificant, but you take on a good amount of risk to save it.

This is not correct. A 10% decline wipes out 50% of your ESPP profit, so your tax savings are actually a loss.

In the scenario above (assuming 33% income tax rate vs. 15% cap gains), the breakeven point for flip vs. hold is a share price decline to ~$96.

[cooperthedog]

One other thought: if you pay $80 for $100 worth of stock, 10% decline wipes out $10 of wealth. Your tax savings are someing like 10% *$20 = $2. $2 isn’t insignificant, but you take on a good amount of risk to save it.

This is not correct. A 10% decline wipes out 50% of your ESPP profit, so your tax savings are actually a loss.

In the scenario above (assuming 33% income tax rate vs. 15% cap gains), the breakeven point for flip vs. hold is a share price decline to ~$96.

[cooperthedog]

One other thought: if you pay $80 for $100 worth of stock, 10% decline wipes out $10 of wealth. Your tax savings are someing like 10% *$20 = $2. $2 isn’t insignificant, but you take on a good amount of risk to save it.

This is not correct. A 10% decline wipes out 50% of your ESPP profit, so your tax savings are actually a loss.

In the scenario above (assuming 33% income tax rate vs. 15% cap gains), the breakeven point for flip vs. hold is a share price decline to ~$96.

[cooperthedog]

One other thought: if you pay $80 for $100 worth of stock, 10% decline wipes out $10 of wealth. Your tax savings are someing like 10% *$20 = $2. $2 isn’t insignificant, but you take on a good amount of risk to save it.

This is not correct. A 10% decline wipes out 50% of your ESPP profit, so your tax savings are actually a loss.

In the scenario above (assuming 33% income tax rate vs. 15% cap gains), the breakeven point for flip vs. hold is a share price decline to ~$96.

[cooperthedog]

Mont9210 – You need to provide us with the primary variables in order to get any solid advice:

What are the rate & terms of your existing mortgage & 30k debt? What is your credit score?

Here is a basic decision list:

IF
your 30k of debt’s rate is >= to your existing mortgage rate
AND
your existing mortgage rate is >= to current mortgage rates
AND
the associated refi & third party fees do not increase the new mortgages “basic” APR above your existing mortgage
AND
the true APR over 10-15 years (your loan timeframe) on the new mortgage is less then your existing.

THEN refinancing the primary mortgage makes sense, otherwise an equity loan or no action would be best (dependent on variables above).

More points to consider;
Your house value can fall to ~430k (yuk), as this is the 80% LTV mark when including your debt (assuming no systemic credit contraction).

Your cash flow if renting should really take into account your 30k worth of debt (which I assume is revolving), as the payments on your existing mortgage and CC debt are almost certainly higher then a consolidated loan.

A poster above mentioned an IO loan. I would stay away from interest only loans, unless you really understand the trade-off between increased cash-flow and the spread you will need to earn on the principal saved to justify it.

The credit card transfer trick is a viable option if you can get a low lifetime rate (and abide by ALL there rules) or if you are willing to risk numerous periodic transfers, with the possibility of teaser rates being higher in the future, adverse changes in your credit score, industrywide credit contraction, etc.

Best of luck.

[cooperthedog]

Mont9210 – You need to provide us with the primary variables in order to get any solid advice:

What are the rate & terms of your existing mortgage & 30k debt? What is your credit score?

Here is a basic decision list:

IF
your 30k of debt’s rate is >= to your existing mortgage rate
AND
your existing mortgage rate is >= to current mortgage rates
AND
the associated refi & third party fees do not increase the new mortgages “basic” APR above your existing mortgage
AND
the true APR over 10-15 years (your loan timeframe) on the new mortgage is less then your existing.

THEN refinancing the primary mortgage makes sense, otherwise an equity loan or no action would be best (dependent on variables above).

More points to consider;
Your house value can fall to ~430k (yuk), as this is the 80% LTV mark when including your debt (assuming no systemic credit contraction).

Your cash flow if renting should really take into account your 30k worth of debt (which I assume is revolving), as the payments on your existing mortgage and CC debt are almost certainly higher then a consolidated loan.

A poster above mentioned an IO loan. I would stay away from interest only loans, unless you really understand the trade-off between increased cash-flow and the spread you will need to earn on the principal saved to justify it.

The credit card transfer trick is a viable option if you can get a low lifetime rate (and abide by ALL there rules) or if you are willing to risk numerous periodic transfers, with the possibility of teaser rates being higher in the future, adverse changes in your credit score, industrywide credit contraction, etc.

Best of luck.

[cooperthedog]

Mont9210 – You need to provide us with the primary variables in order to get any solid advice:

What are the rate & terms of your existing mortgage & 30k debt? What is your credit score?

Here is a basic decision list:

IF
your 30k of debt’s rate is >= to your existing mortgage rate
AND
your existing mortgage rate is >= to current mortgage rates
AND
the associated refi & third party fees do not increase the new mortgages “basic” APR above your existing mortgage
AND
the true APR over 10-15 years (your loan timeframe) on the new mortgage is less then your existing.

THEN refinancing the primary mortgage makes sense, otherwise an equity loan or no action would be best (dependent on variables above).

More points to consider;
Your house value can fall to ~430k (yuk), as this is the 80% LTV mark when including your debt (assuming no systemic credit contraction).

Your cash flow if renting should really take into account your 30k worth of debt (which I assume is revolving), as the payments on your existing mortgage and CC debt are almost certainly higher then a consolidated loan.

A poster above mentioned an IO loan. I would stay away from interest only loans, unless you really understand the trade-off between increased cash-flow and the spread you will need to earn on the principal saved to justify it.

The credit card transfer trick is a viable option if you can get a low lifetime rate (and abide by ALL there rules) or if you are willing to risk numerous periodic transfers, with the possibility of teaser rates being higher in the future, adverse changes in your credit score, industrywide credit contraction, etc.

Best of luck.

[cooperthedog]

Mont9210 – You need to provide us with the primary variables in order to get any solid advice:

What are the rate & terms of your existing mortgage & 30k debt? What is your credit score?

Here is a basic decision list:

IF
your 30k of debt’s rate is >= to your existing mortgage rate
AND
your existing mortgage rate is >= to current mortgage rates
AND
the associated refi & third party fees do not increase the new mortgages “basic” APR above your existing mortgage
AND
the true APR over 10-15 years (your loan timeframe) on the new mortgage is less then your existing.

THEN refinancing the primary mortgage makes sense, otherwise an equity loan or no action would be best (dependent on variables above).

More points to consider;
Your house value can fall to ~430k (yuk), as this is the 80% LTV mark when including your debt (assuming no systemic credit contraction).

Your cash flow if renting should really take into account your 30k worth of debt (which I assume is revolving), as the payments on your existing mortgage and CC debt are almost certainly higher then a consolidated loan.

A poster above mentioned an IO loan. I would stay away from interest only loans, unless you really understand the trade-off between increased cash-flow and the spread you will need to earn on the principal saved to justify it.

The credit card transfer trick is a viable option if you can get a low lifetime rate (and abide by ALL there rules) or if you are willing to risk numerous periodic transfers, with the possibility of teaser rates being higher in the future, adverse changes in your credit score, industrywide credit contraction, etc.

Best of luck.

[cooperthedog]

Mont9210 – You need to provide us with the primary variables in order to get any solid advice:

What are the rate & terms of your existing mortgage & 30k debt? What is your credit score?

Here is a basic decision list:

IF
your 30k of debt’s rate is >= to your existing mortgage rate
AND
your existing mortgage rate is >= to current mortgage rates
AND
the associated refi & third party fees do not increase the new mortgages “basic” APR above your existing mortgage
AND
the true APR over 10-15 years (your loan timeframe) on the new mortgage is less then your existing.

THEN refinancing the primary mortgage makes sense, otherwise an equity loan or no action would be best (dependent on variables above).

More points to consider;
Your house value can fall to ~430k (yuk), as this is the 80% LTV mark when including your debt (assuming no systemic credit contraction).

Your cash flow if renting should really take into account your 30k worth of debt (which I assume is revolving), as the payments on your existing mortgage and CC debt are almost certainly higher then a consolidated loan.

A poster above mentioned an IO loan. I would stay away from interest only loans, unless you really understand the trade-off between increased cash-flow and the spread you will need to earn on the principal saved to justify it.

The credit card transfer trick is a viable option if you can get a low lifetime rate (and abide by ALL there rules) or if you are willing to risk numerous periodic transfers, with the possibility of teaser rates being higher in the future, adverse changes in your credit score, industrywide credit contraction, etc.

Best of luck.

[cooperthedog]

By currency fund, do you mean an actual foreign exchange fund or did you possibly misintepret this and you really have 20% in a money market?

The reason I ask is that an actual currency fund would not meet your goals of “very conservative” so it would make no sense to shift funds into one (unless your advisor thinks, for example, that a fall in the dollar is a “sure thing”, which is a red flag in itself).

[cooperthedog]

By currency fund, do you mean an actual foreign exchange fund or did you possibly misintepret this and you really have 20% in a money market?

The reason I ask is that an actual currency fund would not meet your goals of “very conservative” so it would make no sense to shift funds into one (unless your advisor thinks, for example, that a fall in the dollar is a “sure thing”, which is a red flag in itself).

[cooperthedog]

By currency fund, do you mean an actual foreign exchange fund or did you possibly misintepret this and you really have 20% in a money market?

The reason I ask is that an actual currency fund would not meet your goals of “very conservative” so it would make no sense to shift funds into one (unless your advisor thinks, for example, that a fall in the dollar is a “sure thing”, which is a red flag in itself).

[cooperthedog]

By currency fund, do you mean an actual foreign exchange fund or did you possibly misintepret this and you really have 20% in a money market?

The reason I ask is that an actual currency fund would not meet your goals of “very conservative” so it would make no sense to shift funds into one (unless your advisor thinks, for example, that a fall in the dollar is a “sure thing”, which is a red flag in itself).

[cooperthedog]

By currency fund, do you mean an actual foreign exchange fund or did you possibly misintepret this and you really have 20% in a money market?

The reason I ask is that an actual currency fund would not meet your goals of “very conservative” so it would make no sense to shift funds into one (unless your advisor thinks, for example, that a fall in the dollar is a “sure thing”, which is a red flag in itself).

[Author]

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