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April 16, 2008 at 4:30 PM in reply to: What are you going to do with you’re gov. rebate check next month? #188644April 16, 2008 at 4:30 PM in reply to: What are you going to do with you’re gov. rebate check next month? #188656
ucodegen
ParticipantLooks like no rebate check here either.
Single, over $150K AGI. A significant part through investments. Just barely slid under AMT (not that I have many deductions. What causes me to bounce against AMT limits is the difference in marginal tax rates for W-2 income vs Long Term Capital Gains). This also means that if I bought a house, the mortgage interest may not be deductible for me, or as deductible (so I stay renting for now).
April 16, 2008 at 4:30 PM in reply to: What are you going to do with you’re gov. rebate check next month? #188660ParticipantLooks like no rebate check here either.
Single, over $150K AGI. A significant part through investments. Just barely slid under AMT (not that I have many deductions. What causes me to bounce against AMT limits is the difference in marginal tax rates for W-2 income vs Long Term Capital Gains). This also means that if I bought a house, the mortgage interest may not be deductible for me, or as deductible (so I stay renting for now).
ParticipantI suppose that after a year you could just transfer the balance to another 0% teaser rate credit card.
Notice the amount involved.. and the word “credit cards’“. More than one was involved. What is the likelyhood of being able to rollover the balance into new cards? Each card taken out can affect the FICO score, making it less likely that he can get new cards.. or open a new HELOC. At $45000, there are probably at least 2 if not 3 different major credit cards used.
Consider: why not pay down your LOC by $60k for one year, borrowing the same amount for 0% interest from credit cards? Assuming he is avoiding, say, 7% interest on the LOC, that’s $4,200. He just has to have the gumption to pay off the $60k card debt in one year by tapping into his HELOC
That is assuming that the HELOC will not be closed by the bank. Many people are finding that they can no longer draw on their HELOC because of debt to equity ratios on their property with the price of housing dropping. This method works in a stable or rising house price environment.
ParticipantI suppose that after a year you could just transfer the balance to another 0% teaser rate credit card.
Notice the amount involved.. and the word “credit cards’“. More than one was involved. What is the likelyhood of being able to rollover the balance into new cards? Each card taken out can affect the FICO score, making it less likely that he can get new cards.. or open a new HELOC. At $45000, there are probably at least 2 if not 3 different major credit cards used.
Consider: why not pay down your LOC by $60k for one year, borrowing the same amount for 0% interest from credit cards? Assuming he is avoiding, say, 7% interest on the LOC, that’s $4,200. He just has to have the gumption to pay off the $60k card debt in one year by tapping into his HELOC
That is assuming that the HELOC will not be closed by the bank. Many people are finding that they can no longer draw on their HELOC because of debt to equity ratios on their property with the price of housing dropping. This method works in a stable or rising house price environment.
ParticipantI suppose that after a year you could just transfer the balance to another 0% teaser rate credit card.
Notice the amount involved.. and the word “credit cards’“. More than one was involved. What is the likelyhood of being able to rollover the balance into new cards? Each card taken out can affect the FICO score, making it less likely that he can get new cards.. or open a new HELOC. At $45000, there are probably at least 2 if not 3 different major credit cards used.
Consider: why not pay down your LOC by $60k for one year, borrowing the same amount for 0% interest from credit cards? Assuming he is avoiding, say, 7% interest on the LOC, that’s $4,200. He just has to have the gumption to pay off the $60k card debt in one year by tapping into his HELOC
That is assuming that the HELOC will not be closed by the bank. Many people are finding that they can no longer draw on their HELOC because of debt to equity ratios on their property with the price of housing dropping. This method works in a stable or rising house price environment.
ParticipantI suppose that after a year you could just transfer the balance to another 0% teaser rate credit card.
Notice the amount involved.. and the word “credit cards’“. More than one was involved. What is the likelyhood of being able to rollover the balance into new cards? Each card taken out can affect the FICO score, making it less likely that he can get new cards.. or open a new HELOC. At $45000, there are probably at least 2 if not 3 different major credit cards used.
Consider: why not pay down your LOC by $60k for one year, borrowing the same amount for 0% interest from credit cards? Assuming he is avoiding, say, 7% interest on the LOC, that’s $4,200. He just has to have the gumption to pay off the $60k card debt in one year by tapping into his HELOC
That is assuming that the HELOC will not be closed by the bank. Many people are finding that they can no longer draw on their HELOC because of debt to equity ratios on their property with the price of housing dropping. This method works in a stable or rising house price environment.
ParticipantI suppose that after a year you could just transfer the balance to another 0% teaser rate credit card.
Notice the amount involved.. and the word “credit cards’“. More than one was involved. What is the likelyhood of being able to rollover the balance into new cards? Each card taken out can affect the FICO score, making it less likely that he can get new cards.. or open a new HELOC. At $45000, there are probably at least 2 if not 3 different major credit cards used.
Consider: why not pay down your LOC by $60k for one year, borrowing the same amount for 0% interest from credit cards? Assuming he is avoiding, say, 7% interest on the LOC, that’s $4,200. He just has to have the gumption to pay off the $60k card debt in one year by tapping into his HELOC
That is assuming that the HELOC will not be closed by the bank. Many people are finding that they can no longer draw on their HELOC because of debt to equity ratios on their property with the price of housing dropping. This method works in a stable or rising house price environment.
ParticipantI read the article and was just floored. These people don’t understand carrying costs of the debt. Borrow at 8% or more and stick in a CD yielding maybe 5%.. real smart. So you have $60K or so costing you an additional 3% per year when you were already in trouble?
How about:
Earlier this year, J. Hwang of Fort Lee, N.J., tried to refinance the 7% rate he was paying on his mortgage but couldn’t qualify because his bank was now requiring him to hold more equity in his home. Instead, he decided to take advantage of some credit cards’ 0% balance-transfer offers and borrowed roughly $45,000 to pay down the balance on his home-equity line of credit.Mr. Hwang’s strategy: Since he won’t have to pay any interest on the credit cards for about a year, he figures he will be able to save roughly $2,000 that he would have otherwise had to pay on his home-equity line of credit. Instead, he plans to use the savings to pay down the principal on his mortgage. “I didn’t want to give my bank another penny for interest,” says the 30-year-old health-care worker.
Ok.. can’t refi the 7% so transfer to a credit card, which may be 0% for 1 year (teaser rate) and then is somewhere north of 12% afterwards. Interest on the HELOC is tax deductable, but the credit card interest isn’t. What happens when the cards go off their teaser rates?
Add that to using the savings from one year of interest to pay down on the mortgage (whose interest is also tax deductible and at a lower rate). Again, what happens in the next year? This guy really “screwed the pooch”. He will probably have to BK in a year.
As for the one who pulled 60K in equity for breathing room?.. they are now having to deal with the carrying costs, which will eat them alive.
The general rule in debt, to get out of debt, is to pay off more expensive money with cheaper money. Not the other way around.
ParticipantI read the article and was just floored. These people don’t understand carrying costs of the debt. Borrow at 8% or more and stick in a CD yielding maybe 5%.. real smart. So you have $60K or so costing you an additional 3% per year when you were already in trouble?
How about:
Earlier this year, J. Hwang of Fort Lee, N.J., tried to refinance the 7% rate he was paying on his mortgage but couldn’t qualify because his bank was now requiring him to hold more equity in his home. Instead, he decided to take advantage of some credit cards’ 0% balance-transfer offers and borrowed roughly $45,000 to pay down the balance on his home-equity line of credit.Mr. Hwang’s strategy: Since he won’t have to pay any interest on the credit cards for about a year, he figures he will be able to save roughly $2,000 that he would have otherwise had to pay on his home-equity line of credit. Instead, he plans to use the savings to pay down the principal on his mortgage. “I didn’t want to give my bank another penny for interest,” says the 30-year-old health-care worker.
Ok.. can’t refi the 7% so transfer to a credit card, which may be 0% for 1 year (teaser rate) and then is somewhere north of 12% afterwards. Interest on the HELOC is tax deductable, but the credit card interest isn’t. What happens when the cards go off their teaser rates?
Add that to using the savings from one year of interest to pay down on the mortgage (whose interest is also tax deductible and at a lower rate). Again, what happens in the next year? This guy really “screwed the pooch”. He will probably have to BK in a year.
As for the one who pulled 60K in equity for breathing room?.. they are now having to deal with the carrying costs, which will eat them alive.
The general rule in debt, to get out of debt, is to pay off more expensive money with cheaper money. Not the other way around.
ParticipantI read the article and was just floored. These people don’t understand carrying costs of the debt. Borrow at 8% or more and stick in a CD yielding maybe 5%.. real smart. So you have $60K or so costing you an additional 3% per year when you were already in trouble?
How about:
Earlier this year, J. Hwang of Fort Lee, N.J., tried to refinance the 7% rate he was paying on his mortgage but couldn’t qualify because his bank was now requiring him to hold more equity in his home. Instead, he decided to take advantage of some credit cards’ 0% balance-transfer offers and borrowed roughly $45,000 to pay down the balance on his home-equity line of credit.Mr. Hwang’s strategy: Since he won’t have to pay any interest on the credit cards for about a year, he figures he will be able to save roughly $2,000 that he would have otherwise had to pay on his home-equity line of credit. Instead, he plans to use the savings to pay down the principal on his mortgage. “I didn’t want to give my bank another penny for interest,” says the 30-year-old health-care worker.
Ok.. can’t refi the 7% so transfer to a credit card, which may be 0% for 1 year (teaser rate) and then is somewhere north of 12% afterwards. Interest on the HELOC is tax deductable, but the credit card interest isn’t. What happens when the cards go off their teaser rates?
Add that to using the savings from one year of interest to pay down on the mortgage (whose interest is also tax deductible and at a lower rate). Again, what happens in the next year? This guy really “screwed the pooch”. He will probably have to BK in a year.
As for the one who pulled 60K in equity for breathing room?.. they are now having to deal with the carrying costs, which will eat them alive.
The general rule in debt, to get out of debt, is to pay off more expensive money with cheaper money. Not the other way around.
ParticipantI read the article and was just floored. These people don’t understand carrying costs of the debt. Borrow at 8% or more and stick in a CD yielding maybe 5%.. real smart. So you have $60K or so costing you an additional 3% per year when you were already in trouble?
How about:
Earlier this year, J. Hwang of Fort Lee, N.J., tried to refinance the 7% rate he was paying on his mortgage but couldn’t qualify because his bank was now requiring him to hold more equity in his home. Instead, he decided to take advantage of some credit cards’ 0% balance-transfer offers and borrowed roughly $45,000 to pay down the balance on his home-equity line of credit.Mr. Hwang’s strategy: Since he won’t have to pay any interest on the credit cards for about a year, he figures he will be able to save roughly $2,000 that he would have otherwise had to pay on his home-equity line of credit. Instead, he plans to use the savings to pay down the principal on his mortgage. “I didn’t want to give my bank another penny for interest,” says the 30-year-old health-care worker.
Ok.. can’t refi the 7% so transfer to a credit card, which may be 0% for 1 year (teaser rate) and then is somewhere north of 12% afterwards. Interest on the HELOC is tax deductable, but the credit card interest isn’t. What happens when the cards go off their teaser rates?
Add that to using the savings from one year of interest to pay down on the mortgage (whose interest is also tax deductible and at a lower rate). Again, what happens in the next year? This guy really “screwed the pooch”. He will probably have to BK in a year.
As for the one who pulled 60K in equity for breathing room?.. they are now having to deal with the carrying costs, which will eat them alive.
The general rule in debt, to get out of debt, is to pay off more expensive money with cheaper money. Not the other way around.
ParticipantI read the article and was just floored. These people don’t understand carrying costs of the debt. Borrow at 8% or more and stick in a CD yielding maybe 5%.. real smart. So you have $60K or so costing you an additional 3% per year when you were already in trouble?
How about:
Earlier this year, J. Hwang of Fort Lee, N.J., tried to refinance the 7% rate he was paying on his mortgage but couldn’t qualify because his bank was now requiring him to hold more equity in his home. Instead, he decided to take advantage of some credit cards’ 0% balance-transfer offers and borrowed roughly $45,000 to pay down the balance on his home-equity line of credit.Mr. Hwang’s strategy: Since he won’t have to pay any interest on the credit cards for about a year, he figures he will be able to save roughly $2,000 that he would have otherwise had to pay on his home-equity line of credit. Instead, he plans to use the savings to pay down the principal on his mortgage. “I didn’t want to give my bank another penny for interest,” says the 30-year-old health-care worker.
Ok.. can’t refi the 7% so transfer to a credit card, which may be 0% for 1 year (teaser rate) and then is somewhere north of 12% afterwards. Interest on the HELOC is tax deductable, but the credit card interest isn’t. What happens when the cards go off their teaser rates?
Add that to using the savings from one year of interest to pay down on the mortgage (whose interest is also tax deductible and at a lower rate). Again, what happens in the next year? This guy really “screwed the pooch”. He will probably have to BK in a year.
As for the one who pulled 60K in equity for breathing room?.. they are now having to deal with the carrying costs, which will eat them alive.
The general rule in debt, to get out of debt, is to pay off more expensive money with cheaper money. Not the other way around.
ParticipantFirst.. fixing the link, it is
http://www.huduser.org/Publications/PDF/hisp_homeown9.pdf
The server seems iffy.. and the transfer hung and had to be restarted several times. It is running Microsoft-IIS/5.0 on Windows 2000, so don’t expect too much.
As for dependency, or correlation to home ownership, you have to be careful of doing a statistical analysis when all independent variables are not considered. The end result will be a dependent variable, being identified as an independent variable. (dependent=result, independent=causal)
From my personal experience and from the experience of my “parental unit” who used to work as a Mentor Teacher, LA City School District; the single most important variable to the success of the child is parental involvement in the child’s education. The best way to see this is to look at the children of immigrants and ask “Why do some succeed and some do not when coming from the same financial background and often same neighborhoods?” Many of the aspects in parents that give rise to being involved in their child’s growth, also give rise to ‘family trees’ that rapidly pull themselves into better financial condition that also make it easier for them to purchase houses (thereby the home ownership actually being a dependent variable of this characteristic). A converse comparison might be interesting in identifying descendants of homeowners and the ‘better off’, who themselves are no longer better off.
Others important variables are:
*Education level of the parents.
*Willingness of parents to further their education while working.
*Willingness of the parents to learn what their child is learning (if they don’t already), and to tutor the child themselves if necessary – working with the child on their education.ParticipantFirst.. fixing the link, it is
http://www.huduser.org/Publications/PDF/hisp_homeown9.pdf
The server seems iffy.. and the transfer hung and had to be restarted several times. It is running Microsoft-IIS/5.0 on Windows 2000, so don’t expect too much.
As for dependency, or correlation to home ownership, you have to be careful of doing a statistical analysis when all independent variables are not considered. The end result will be a dependent variable, being identified as an independent variable. (dependent=result, independent=causal)
From my personal experience and from the experience of my “parental unit” who used to work as a Mentor Teacher, LA City School District; the single most important variable to the success of the child is parental involvement in the child’s education. The best way to see this is to look at the children of immigrants and ask “Why do some succeed and some do not when coming from the same financial background and often same neighborhoods?” Many of the aspects in parents that give rise to being involved in their child’s growth, also give rise to ‘family trees’ that rapidly pull themselves into better financial condition that also make it easier for them to purchase houses (thereby the home ownership actually being a dependent variable of this characteristic). A converse comparison might be interesting in identifying descendants of homeowners and the ‘better off’, who themselves are no longer better off.
Others important variables are:
*Education level of the parents.
*Willingness of parents to further their education while working.
*Willingness of the parents to learn what their child is learning (if they don’t already), and to tutor the child themselves if necessary – working with the child on their education. -
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