"John A. Weeks III" <john[at]johnweeks.com> wrote in message
- quote -

Yup. I should have clarified:

Mortgage is originally $95,000, fixed at 6 7/8 % APR for five years,
after that it's variable. There is an early payment penalty of 2%
original principal until the variable rate kicks in. That means
around $1900+closing costs to refinance. We're in our second year
right now and we're at about 88%, but we don't pay PMI.

I guess what I need is help figuring out how long we would need to
keep the house to justify refinancing just two years after buying it.
My guess is that right now it wouldn't make a huge difference, even if
we locked in a significantly lower interest rate. In 10 years it
might, but I'm not sure if we'll be in the house for 10 years. Too
many unknowns

I think I'll just concentrate on building up an emergency fund of $10K
or so over the next few years rather than throwing away money in
refinancing or paying extra on low-interest loans.

Thanks for your help,

joseph

In article <jqnfpv042u7f7gncm377r4662rr6bvd2v5[at]4ax.com> , HW \"Skip\"
Weldon <skip5700removethis[at]hotmail.com> wrote:

- quote -

However, in the case of Warren Buffett, he certainly has better
vision than I do.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
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In article <6b6ea86e.0310230347.16aa008a[at]posting.google.com> , Joseph
O'Brien <obrien1984[at]hotmail.com> wrote:

- quote -

Something sounds out of whack with your mortgage. Adjustable
mortgages are down in the 4% range right now. Fixed are in
the high 5% range. You say you have 30 years on the mortgage,
so did you just get this? If so, you appear to have been
ripped off. If it is an older mortgage, then you are still
being ripped since it should have adjusted below that rate.

In either case, go refinance your mortgage. At the same time,
beg, borrow, or steal an extra $4600 to get yourself under that
magic 80% number. Hit up your partents, in-laws, Santa, or a
home equtiy loan. This will allow you to get rid of the PMI
(Private Mortgage Insurance), which will save you $50 to $100
a month. That would sure come in handy for paying the rest
of the bills.

Your car will take care of itself within the year. Your
Stafford is at a good rate, so I'd pay that as normal, unless
you get some extra cash. The regular student loan is only
$940, so pay that puppy off so you can clear it from your
record and get at least one of these wiped out (even though
it is 0%, it is one less thing to worry about).

Being young, with a good income, and your finances under
control, I'd suggest first building up a few bucks in your
reserve fund, and then save like crazy for retirement. Every
dollar you save at age 25 is like saving $1000 at age 55.
Talk to your accountant or tax preparer or financial advisor,
and see what you can do for both an IRA and a Roth, for both
you and your wife. Trust me on this one...once kids come along,
it will be a lot harder to save for retirement.

Since you and your wife are both young and able, I'd suggest
picking up some extra part time jobs. This will help you
pay off that car loan quicker and build up a serious nest
egg. If you have any extra time, do this now. Once you
have kids, you will be tired all the time, and have a lot
more bills, and at least one of you will want to quit work
and stay home. So, do it now while you can. It will create
a lot more options later on when you really need the money.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

obrien1984[at]hotmail.com (Joseph O'Brien) writes:

- quote -

Actually, this is a peculiar case. Another theory goes that you should
pay off "bad" kinds of debts (credit cards, car loans) before "good" debts
(mortgage, student loans). The latter generally carry preferential tax
treatment, etc.

- quote -

Do you have an emergency fund? 3-6 months' living expenses tucked away
in a safe cash investment like a savings or money-market account? If not,
building one up might be your first priority.

- quote -

A couple of comments....

6.75% seems like an awfully high rate for an adjustable-rate mortgage
nowadays, or even a fixed-rate one. Is refinancing a possibility, or
do you not plan on staying in this home long enough to make it
worthwhile? If you are worried about your future income going down,
a fixed-rate mortgage will be a lot better for your peace of mind.

Are you still paying PMI on your mortgage? If so, and if you can pump
enough extra cash into your mortgage to qualify to get rid of the PMI,
that's probably the best use of the money in the short term. PMI is
just money out of your pocket.

- quote -

There are some loan calculators at finance.yahoo.com, but I'm really not
sure it's worth the hassle of trying to figure everything out to the last
cent. There are a number of reasonable things you could do with your
extra money. Personally, I would pay off the car loan and build up the
emergency fund instead of putting money into the mortgage unless PMI is
an issue. Otherwise try to refinance the mortgage at a better rate
instead of accelerating payoff of the principal.

-Sandra

On Thu, 23 Oct 2003 08:59:25 CST, Sandra Loosemore
<sandra[at]frogsonice.com> wrote:


- quote -

I like that sentiment.

I'm not sure who originally said it (Buffett?) or what the exact quote
was, but it was something to the effect that if he couldn't see the
benefit without a calculator, it wasn't enough of a benefit to
interest him.


-HW "Skip" Weldon
Columbia, SC

One question on the mortgage, when is the next adjustment due and what is
the standard?

Just pay off the car loan on schedule.

What's the APR on these loans?

"Joseph O'Brien" <obrien1984[at]hotmail.com> wrote in message
news:6b6ea86e.0310230347.16aa008a[at]posting.google.com...
- quote -

I am interested in the best plan to pay off my debts (isn't
everyone?). When reading through the newsgroups for advice on this
topic, though, I get very confused about tax deductable interest, how
to figure compounding interest, etc.

I know that one should always pay off the highest interest loan first.
For me, it would obviously be my 6.75% mortgage (see below).
However, my biggest concern is that over the next 10 years, something
is going to happen to cause our income to be cut in half (or worse)
and we won't be able to make monthly payments. Therefore, would you
agree that, while expensive in the long run, we should pay off the the
"easiest" loans first to reduce monthly payments? I've pared down our
discretionary expenses so that we have some money left over each
month; I could probably cut spending even more, but it would be hard.

I'm 25, married, no kids, with a total household income of just over
$50K/yr. My wife and I have the following assets/debts:

Home: Valued at $110,000
Simple IRAs: $5,000 (employer matches up to 3%)

Mortgage: 92,600 at 6.75% (variable) for 30 yrs.
Car: 2,236 at 4% simple interest, 1 year left
Stafford (Student) loans: 33,162 at 4.25% simple, 14 yrs left
Student Loan: $940, 0% interest, 10 yrs left.

Things I'm really confused about: how to figure after-tax interest
payments, how making extra principle payments will affect both
compounding and simple interest loans, and, of course, how it all
works together. My financial situation isn't too complex, I just need
the tools to figure it out. Can anyone help?

THanks,
joseph