ANONYMOUS personal finance poll

[max power]

What is HELOC?

[madcat6183]

2 minutes ago, Tonik said:

Student debt is the same as any other debt, other than you can't dismiss it with bankruptcy.  Refi to the lowest rate possible, but don't encumber your HELOC with it, and pay off the highest rate debt first.

Yeah, no way we would put it on any attached debt, but more looking for any consolidation companies out there.  She did once but I feel there has to be better options now.  I have no idea as never personally looked into it, but hoping for some info. 

[max power]

I am also about to do a pole barn and new driveway and have cash to do most of it with. Would I be smarter to sync that cash in my retirement and take an equity loan out on the house?

 

I owe less than half of my homes value but I'm 45 and want to have it paid off by retirement

[madcat6183]

2 minutes ago, max power said:

What is HELOC?

Home Equity Line of Credit , sorry

[redkow97]

I 'refinanced' my student loans with FedLoan, but that was upon THEIR insistence, not mine.  Because I am eligible to have my balance forgiven after 120 on-time payments, they want to pay themselves interest rather than pay someone else ...but they were fine with ME paying someone else the interest <eye roll>

 

What's the rate on your wife's loan(s), and what kind of money are we talking here?  I owe around $90k for school, but my mortgage is double that, so even with a 3.8% rate on the mortgage, 7.8% on half the balance is about the same as far as what I pay monthly - the compounding will get ya though.

[madcat6183]

3 hours ago, max power said:

I am also about to do a pole barn and new driveway and have cash to do most of it with. Would I be smarter to sync that cash in my retirement and take an equity loan out on the house?

 

I owe less than half of my homes value but I'm 45 and want to have it paid off by retirement

See that's the thing we have to run by our guy because when we do the pole barn I think we'll be in the same boat, have about 1/2 to 2/3 cash IF we don't pay the cars off completely and only do 1.  So should we invest it or should we just not do the HELOC. 

 

In your case, I would think if you have the Equity I would pull from that and invest at least some of the cash to see the return there.  BUT a lot of people have different opinions on retirement age too.  Amanda and I plan to retire by 60, hopefully 55.  So we are trying to let our investments grow and put money in there and then pay less in interest on what we borrow than what we are making on those.  

 

Your last statement is where I am going there.  It might be best to split the difference with your age and thinking of paying it off before retiring. 

[Connie14]

HELOCs are tax deductible, and they tend to have low interest payments.  Fund the retirement and finance the home improvements. You cannot finance your retirement. 

[max power]

17 hours ago, Connie14 said:

HELOCs are tax deductible, and they tend to have low interest payments.  Fund the retirement and finance the home improvements. You cannot finance your retirement. 

That's a good point. Guess I need to consult my tax guy. 

[madcat6183]

18 hours ago, Connie14 said:

HELOCs are tax deductible, and they tend to have low interest payments.  Fund the retirement and finance the home improvements. You cannot finance your retirement. 

Honestly, this hadn't even crossed my mind.  Well decision made here.  We're going to talk to a local CU or Bank that does AG loans too.  Maxpower, recommend doing the same.  You probably qualify for Agriculture rates out there, which are always lower, especially on 2nds and HELOCS. 

 

If you find a builder can you send me their info?  I still can't decide if I really like one over another of who I have talked to.  At some point cost does play into it too.

[Gixxus Christ!]

We have a lot of debt but it's mortgage and student loans, some dental work and recently, $4k in vet bills to save ruger's life. Our credit card debt is negligible, I have maybe $400 I'm carrying, my wife about half that, and generally we carry about that much plus or minus, I use mine for tools and stuff for the garage, she uses hers for occasional shopping trips, but hers has a huge limit in case of emergencies.

[2talltim]

In my upper 30's, $150k house is over half paid off, all cars are paid off(almost: 3 payments), carry zero CC debt, I will not finance toys, $25k in student loans(used to be $40k), just did 0% on a mower that was needed, and teenagers are expensive.

We make a tad over $100k, 15% of my check and 10% of the wife's pay go strait in to 401k with 5% company matches. I only have around $1000 in the bank at any given time because my goal is to be debt free by the time I'm 45 and over $150k in our 401k's. All extra money at the end of the month goes to student loan right now.

 

 

 

[ScubaCinci]

If you are going to pay off your mortgage as quickly as possible and not have at least 6 months hh income in liquid assets on hand, open a HELOC. You don't have to use it but it's there something big happens. If you wait to open it when you really need it, it will probably be too late.

i personally would save the extra money rather than pay down the mortgage if you don't have at least 6 months income on hand. You paint yourself into a corner without the HELOC to fall back on and the interest on the loan is tax deductible. 

[shittygsxr]

On Tuesday, May 03, 2016 at 10:11 AM, madcat6183 said:

I do have one question on this topic;  Wife had to finance about 90% of her schooling, 7 years for her doctorate.  With that said, we've paid a lot down, but still have some left, enough that I would like to look into consolidation.

 

Anyone have recommendations?

 

Thanks

Drb and sofi have good rates, remember that tax deductible interest (mortgage and student loans) needs to be viewed in a different light that interest on a credit card or auto loan.

It seems like most people in this thread have good intentions but could benefit from spending more time learning finance. 

 

Poor decisions on allocation of finances early on is gonna cost them millions by the time they are ready for retirement.

Disclaimer: Of course there are income limits to writing off student loan interest

Edited May 5, 2016 by shittygsxr

[shittygsxr]

13 hours ago, 2talltim said:

 

In my upper 30's, $150k house is over half paid off, all cars are paid off(almost: 3 payments), carry zero CC debt, I will not finance toys, $25k in student loans(used to be $40k), just did 0% on a mower that was needed, and teenagers are expensive.

 

We make a tad over $100k, 15% of my check and 10% of the wife's pay go strait in to 401k with 5% company matches. I only have around $1000 in the bank at any given time because my goal is to be debt free by the time I'm 45 and over $150k in our 401k's. All extra money at the end of the month goes to student loan right now.

 

 

 

 

 

 

You would probably do better, not trying to pay off your student loans ,with tax deductible interest, and use the extra money to purchase stock or an etc with a proven dividend history. 

 

Nothing worse than being 60 still working and having too much in a retirement account that you can't get yet

 

[2talltim]

You would probably do better, not trying to pay off your student loans ,with tax deductible interest, and use the extra money to purchase stock or an etc with a proven dividend history. 

 

Nothing worse than being 60 still working and having too much in a retirement account that you can't get yet

 

False, the last 2 years my standard deduction was higher than my itemized. A d I will be retired but the wife who make more and loves her career will still be working

[shittygsxr]

On Monday, May 02, 2016 at 2:47 PM, redkow97 said:

Fair point. 

I am just finding it SHOCKING how much debt some people are carrying.  I know there are horror stories out there, but I didn't expect those stories to be about people (okay, one person in particular that has sparked this thread) who I know and consider friends.

I recently learned that a friend carries over $25,000 in credit debt.  I'm trying to figure out how they were able to buy a house...

Remember debt is relative. 

 

25k in credit card debt for someone making footlongs is not the same as a radiologist that makes 45k a month

[shittygsxr]

4 minutes ago, 2talltim said:

False, the last 2 years my standard deduction was higher than my itemized.

True, your tax guy is an idiot.

Also,

Claiming the Deduction

 

The student loan interest deduction is an adjustment to income. To claim the deduction, enter the allowable amount on line 33 (Form 1040), line 18 (Form 1040A), line 33 (Form 1040NR), or line 9 (Form 1040NR-EZ)

 

It looks like you need to file amended returns for previous years and get some of your money back. 

You are welcome and I won't even charge you for the advice. I just made you money

Edited May 5, 2016 by shittygsxr

[2talltim]

True, your tax guy is an idiot.

Also,

Claiming the Deduction

 

The student loan interest deduction is an adjustment to income. To claim the deduction, enter the allowable amount on line 33 (Form 1040), line 18 (Form 1040A), line 33 (Form 1040NR), or line 9 (Form 1040NR-EZ)

 

It looks like you need to file amended returns for previous years and get some of your money back. 

You are welcome and I won't even charge you for the advice. I just made you money

I know how it works and it used to pay out on my favor. I figure it both ways every year and like I said above the last 2 years it wasn't enough to be more than the standard deduction. Noone did anything wrong and monies are due to me. Once you pay your debt down so far and are paying more towards principal than interest this is just the way it is. So my tax guy(me) isn't a idoit you must be.

[shittygsxr]

No really, you do not know what you are doing. Student loan interest is an adjustment to your income. It does not matter if you take the standard deduction or itemize.  It is a separate deduction. 

 

Just say "oh crap I fucked up, thanks for helping me get my money back"

 

This is called the student loan interest deduction and it can reduce your taxable income by up to $2,500 even if you don't itemize

[2talltim]

No really, you do not know what you are doing. Student loan interest is an adjustment to your income. It does not matter if you take the standard deduction or itemize.  It is a separate deduction. 

 

Just say "oh crap I fucked up, thanks for helping me get my money back"

 

This is called the student loan interest deduction and it can reduce your taxable income by up to $2,500 even if you don't itemize

Maybe I'm just not explaining it right but garentee you it was done properly. Every year I figure the taxs into 3 different tax programs(to make sure they are all the same) and figure it thelong way too. And then have a family member that does taxes proof read the final to check for errors. I think what you might be saying I already do, but what I'm saying is true also. The student loans get entered where they should, I 200% garentee it.

[shittygsxr]

You are not explaining it correctly because software did your taxes and not you. 

The software probably did it correctly for you and adjusted your income. Chances are it's did it and you didn't know.

 

My statement is still 100% correct that paying down debt, with tax deductible interest, should not be a top priority.

 

Edited May 5, 2016 by shittygsxr

[2talltim]

The software probably did it correctly for you and adjusted your income. Chances are it's did it and you didn't know.

 

My statement is still 100% correct that paying down debt, with tax deductible interest, should not be a top priority.

 

Still my plan is to be debt free. Deductible or not I don't want it. The wife will need another car in a year or two and I want it payed off by then too.

[Limitedslip7]

The student loan interest deduction also gets phased out if you are making more than $75k a year too, and completely eliminated if you make more than $80k. 

[2talltim]

And I apologize for the idiot remark, I was just getting frustrated because I know I had it done right.

[2talltim]

The student loan interest deduction also gets phased out if you are making more than $75k a year too, and completely eliminated if you make more than $80k. 

This could explain the confusion. Because I swear the last couple years it has made no difference in how much I got back entering the INT vs not