International Region, Women in Red Racers

[debtheaven]

Ha ha Minnesota! Sorry about that! I did decide to call in sick ... but this morning DD really and truly preferred to go with her BF! (It's school vacation here so he offered to take her there.) I figured she'd be more relaxed with him than me so I treated them to lunch near her exam.

DD says she did badly ... four hours of testing / interviewing! Sheesh. We'll get the results in about two weeks but she feels this school will be too hard for her and I don't want to push her too hard. She is already accepted at one school she really likes so it's not a big deal.

ETA: The school she has been accepted at is one year shorter and 1800 less expensive per year. Somehow I think she will be accepted to the one she tested for today, I don't think she "messed up" as much as she thinks she does. But, I have seen the results of 'pushing" her and I won't do that again. We shall see! The important thing is that DD already has an affordable option she is happy with.

PS What happens in 181 days?!

[Minnesotagirl7]

debtheaven- I hope she's just being too hard on herself, and that it went well. But it sounds like she has a great option in case it doesn't.

In 181 days I hope to make the last payment on some non-racing debt that I want paid off before I get back to really attacking my racing debt.

[debtheaven]

Thanks for your comment Minnesota!

From what she recounted, it didn't go well, but I don't think it went as badly as she thinks. I almost hope she doesn't get in because she prefers the other school. Although we like the other school, we prefer this one. I hoped she'd prefer the one we do, but if she doesn't, I won't push it.

On the bright side, the school she prefers is significantly less expensive! LOL

Best of luck with the non-racing debt!

[psychobabbler]

£19,129 (April 2 2010 £22,653 ,IU 68, IU 74,IU 80, IU 110, IU126, IU146,IU162) -15.55% (£3524) paid off

type-----rate----outstanding----payment----------original debt
Loan-----21.33%--£8808----381.35 monthly-- (originally £14000) -37.08% paid off
CC1------17.90%--£0---------0----------------(originally £4500) 0.0000% paid off transferred to CC3 b/c of 0% for 12 months
CC2------16.90%--£6380----165.00 monthly-- (originally £7500) -14.93% paid off
CC3------0.00%---£3541-----200.00 monthly--( CC1 £4500) -21.31% paid off
Overdraft---------£ 400.00----------------------------400

total--------------£19,129---746.35 monthly-----(originally £26,400) -27.54% paid off (£7271)

[bubbleepink]

ldawn: Thanks for the advice, these are all things to consider.
"This all largely depends on how much you can get for selling/trading in both of your vehicles. Chances are the value of the car is less than what you owe, so you'll end up still paying some on the car loans after they've been sold." - I actually owe less then the car is worth (according to AUTO TRADER) Similar cars are going for about 22G's I owe 16ish. I bought it in August with a rather large down payment so that I could get my monthly payments to an affordable rate. I will break even for sure. We will lose money on my bf's car because he has done A LOT of mods. But we are thinking if we sell it, then he will not be spending money on it this summer (by adding more mods).

"One thing to keep in mind is that often selling the car will get you a better price than trading it in. What I'd recommend is looking at similar vehicles being sold and find out what they sold for, or look at the book value price. Based on those, figure out how much you could get and compare to what you owe...Another thing to consider is that you could just sell one car and keep the other. You could put the money you're paying on one loan to the other and pay it off very quickly." We are looking at all of these options we will defiantly be selling BF's car privately because of the mods, we hope that we can sell it as is and *cross your fingers* break even on the debt. But are not completely oblivious to life, and know this would be a very specific buyer at that point. Chances are you'll end up saving money at some point, since you're going from 2 vehicles to 1, but it may not wipe out the car loans completely.

"Buying an SUV is harder on gas than cars, and if you're driving from AB to ON, this should definitely be a consideration. If you're only driving home and back in the summer, why do you need an SUV?" It's actually not about the summer, it is about the winter driving in the far north of Alberta. We live very close to the NWT and winters are very bad with a car, even with $1200.00 worth of winter tires. Additionally, we are looking at SUV's that will give us about the same mileage as the civic.

Debtheaven:
BF brought up your question about having access to cars when we are home. I would have access to a car on most evenings, so he would probably "keep" our car for the summer. Also, he spends most of his time at my parents place anyways, so I don't see the 1 car being too much of a problem, just more of an annoyance.

I totally see what your are saying about sharing one car. When we are here in Alberta, we don't go anywhere without each other because we are so secluded. We just want a solution that will make us feel safer on the road without continuing the debt cycle.


Another question that I have been meaning to ask is: What is the debt equity ratio that is acceptable (from the bank) when you apply for a mortgage? I have heard as high as no more then 30% of your gross income but as low as 20%. Is there an industry standard?

[ldawngirl]

Feb 15, 2011 21:31:16 GMT -5 bubbleepink said:

Another question that I have been meaning to ask is: What is the debt equity ratio that is acceptable (from the bank) when you apply for a mortgage? I have heard as high as no more then 30% of your gross income but as low as 20%. Is there an industry standard?

Anything less than 30% is considered acceptable by most banks or lenders. I've heard some banks will stretch this to 35% or so. Right now with the economy being what it is/was, the banks are more stringent and getting a loan or mortgage is even harder (from what I hear). But if you're buying in 12-18 months, hopefully things will relax a bit.

Also, it's your debt to income ratio that matters the most - DTI.

[debtheaven]

Psychobabbler
Congrats on over 27% paid off!! Are things getting easier for you now? I hope so!

Bubblee I second everything IDawn said, I have always heard no more than 30% gross income. It's the same here, no more than 30%.

Also, it sounds like having just one car could work for you.

But I think you have to keep your future plans in mind. If you live in a very HCOLA area (I know you don't now), daycare can cost as much or even more than a mortgage.

I don't know what the RE market is like where you want to buy but if you and your DF are OK with buying a duplex and renting half out, I think that's a fabulous way to get started.

[debtheaven]

I keep wanting to ask you all for advice but every time I try, I end up with a LONG, LONG post LOL. I'm going to try one more time and to try to make it succinct.

[debtheaven]

OK, so question.

Let's say I have basically paid off the car loan and the "earnest money" loan I am not racing (since I always knew it was very short-term).

I now have BALLPARK 12.5 K left.

- Our current account and rental account need about 3K to be out of the red (half of that is half this year's special assessments).
- We still have that rental reno loan, 10.9K, 190/mo for 68 months, 4.3% interest.
- We still have our boiler loan, 2.3K, 155/mo for 15 months, 2.75% interest.

DH wants me to pay off the rental reno loan, and save a lot in interest and 190/mo.

I am tempted to pay that loan off too, but I am also tempted to pay off OVER HALF the rental reno loan (6K out of 10.9K), save less in interest, and use the other 5K to:
- pay off the boiler loan to free up 155/mo (it would take two more months)
- stick another 1K into our current / rental accounts which would pay off the rest of the overdraft AND pay for the April special assessment bill
- put 2K towards our vacation fund.

I know the "vacation fund" sounds terrible, but that is really what all our extra income is about. DS2 is doing a semester abroad and he wants us to visit him. It is VERY difficult to tell him we've done it three times in the past for your older brother, but no, we can't / won't do it for you. If we do opt to do that trip, we will NOT incur debt for it. We would meet where we have friends / family and stay with them for most of the time.

Any thoughts / advice?

DH absolutely wants to pay off the rental reno loan because it bugs him so. It bugs me too but I think it is stupid to spend 10.9K to free up 190/mo when I can spend 2K to free up 155/mo instead, and still have 9K left over to: put 6K towards the reno loan, 1K more towards our current / rental accounts and 2K for summer vacation.

ETA: We still have a rental mortgage at 34K (4% interest) but that is not in this equation.

ETA2: The other reason DH wants us to pay off the 10.9K rental reno loan is that if we do, we would have a "quick win" in 15 months when the boiler loan is gone. I do see his point. If I do it "my way", our next win is the rental reno loan in about three years.

[debtheaven]

My way:
- 355 (car) + 155 (boiler loan) = 510 savings per month. Minus 310 new rental mortgage to come = 200 savings per month. Plus 9K leftover for bank accounts, rental reno loan, vacation.
- Next "win": 190/mo in 33 months (instead of 69!) when rental reno loan is paid off.

DH's way:
- 355 (car) + 190 (rental reno loan) = 545 savings per month. Minus 310 new rental mortgage to come = 235 savings per month. Plus about 2K left for our bank accounts.
- Next "win": 155/mo in 15 months when boiler is paid off.

ETA: I have discounted the "earnest income" loan because it is very short term, the bank made us take it out for just a few months till both transactions go through.

[el1504]

UPDATE

EL1504[2]: 02/17/2011 $2,929.99 (3/19/2010 $6,751.42 IU62)

Yeah under $3,000 and on the home streach!

[debtheaven]

YAY EL!!! Under 3K!

When are you planning to be done?!

[el1504]

DH - I like the idea of puting $6,000 on the rental reno loan and saving some for something for yourself (the holiday). But then I always have the philosophy that you can not keep depriving yourself otherwise you will one day have blow out.

If having $2,000 set aside to visit DS2 is an important family goal then it is important enough to say well we will wait a little on the reno loan.

[el1504]

DH - In June hopefully (8 more pays to go).

[debtheaven]

EL thank you so much for saying that. The irony is DH is always wanting to take expensive summer vacations. I LOVE LOVE LOVE travelling but I am much better at renting locally and doing the cooking / cleaning thing. DH HATES it.

But I really don't see how I can refuse my DS2 on this. Especially since DS1 wants to meet up too! It gets expensive but it creates such AMAZING memories. Our trip to Central America two summers ago (at DS1's insistence) was one of the best trips of my life. And once again, I have to credit DH for making us do it.

The days are finally getting longer now, June is just around the corner! You'll be there in no time!

Again, thank you EL!

[mom2-4monkeys]

Debtheaven
Just my two cents for what's it's worth...
I too would go "your" way. Like EL said you need to take time out for family. It really wouldn't be fair to DS #2 if you didn't visit. Your are still paying off SOME of the debts and having fun too!!

[Minnesotagirl7]

debtheaven- Another vote for "your" way.

[ldawngirl]

DH - How would it work if you pay the accounts 3K, put 2K into a vacation fund (even though it's not necessary, it's an important thing that should take priority) and put the rest on to the rental loan? How long then would that loan take to pay off? I know I would want to put it all on the boiler loan too and have that one be done, but saving the time on that long loan and the money in interest is a huge advantage... plus as your DH said, your boiler loan is due to be paid off soon enough anyway.

[debtheaven]

Mom2Monkeys and Minnesota, thank you both SO MUCH!!!

Mom thank you SO MUCH for coming on over here! It is greatly appreciated! I have four monkeys too LOL!

I have already told DH that as CEO of this family, I will make the final decision, not him. But, I was fretting about it and second-guessing myself. You all are making me feel SO much better!

[debtheaven]

DH - How would it work if you pay the accounts 3K, put 2K into a vacation fund (even though it's not necessary, it's an important thing that should take priority) and put the rest on to the rental loan? How long then would that loan take to pay off? I know I would want to put it all on the boiler loan too and have that one be done, but saving the time on that long loan and the money in interest is a huge advantage... plus as your DH said, your boiler loan is due to be paid off soon enough anyway

Idawn it would work but it would require us paying both the 190 per month and the 155 per month. If I put 7K towards the rental loan (keeping 2K back for vacation) it would take two years to pay the rental loan off (assuming I shorten the term and not the monthly payment). If I put 9K towards the rental loan (keeping 2K back for vacation) it would take one year.

I considered both possibilities and concluded that two years was too long to keep both loans. I think I need to be done with one of them ASAP to reduce one monthly payment.

It is a good suggestion though, we could probably manage both payments. But, to what avail? Frankly I'd really prefer to lose one or the other sooner rather than later.

[el1504]

I can understand the desire to get down to one payment instead of two. Can you use that a a goal for DH? or can the money that you save from only making one payment help pay for something he values?

[ldawngirl]

OMG, I am so annoyed right now and I just need to vent. One of my investments was set to come out on the 15th of every month. Well, I cancelled this in late December, as if I had an investment with my bank (the one I have my chequing account with), they don't charge me for the account. So I cancelled the investment with my investment group that comes out on the 15th of the month. In January, it still came out, but I figured that was to be expected since the holidays and such would have messed with the timing on the paperwork. But then it came out in February and it went NSF. Ugh! So I got an NSF fee of $40. I am so peeved. My investor rep says she'll look into it and they can reimburse me the $40, but I'm just so angry!

At first I was doubting whether I cancelled the withdrawal, but I remember clearly emailing her and explaining that the bank would give me this free chequing account and I was just swapping the one for the other. I even told her to move the money sitting in that one account to another account. So Ped off.

Sorry, just had to vent... I know I'll get that $40 back, but it's such a hassle and I have to wait until I get it and who knows how long that takes.

[Minnesotagirl7]

Idawngirl- That's so frustrating, I totally know what you mean. Its the hassle.

[alicesfreedom]

Well, Good morning.
Little annoyed that we used the almost paid off second credit card to buy flooring but had to do it.
We bought an older house and it needs to be redone. The youngest daughters room had green shag rug and really badly insulated walls. So 2 years ago we did just the walls, that was good. Just about a year later I'm helping her pick up some of her toys, I find a rusty old fish hook and a big rusty needle and to my surprise she has never step on them.
So fast forward I find a huge area rug at our local Share shed ( where you put items for other people to pick up and take home) I take it home and carpet clean it and get rid of green carpet. So the other day hubby decides to get flooring and gets it while I was grocery shopping.
So another big job to do. Thinking about it I think I'm more annoyed because he goes to work in 2 days and I have to finish it. So another weekend with out doing something for me. Not good.

[Minnesotagirl7]

The 5500 Club has been updated, you can see it here:
notmsnmoney.proboards.com/index.cgi?board=wir&action=display&thread=1118

The 5.6k-24k Club is up-to-date, check it out here:
notmsnmoney.proboards.com/index.cgi?board=wir&action=display&thread=1117

[debtheaven]

Idawn
I'm sorry I know how frustrating that can be!

Alice
Sorry for you too, but I'm so glad your DD never stepped on that fishhook! That could have turned very badly. I'm so sorry for that "big job" but you WILL feel so good once it's done ... can you get your DH to take another day or even half day off to help you finish the job?

[debtheaven]

can the money that you save from only making one payment help pay for something he values?

El at this point we are both totally on the same page, we just want the monthly obligations to go down and to be less tight every month. Although I don't want to disappoint my DS2, DH is the one actively pushing for this vacation, not me. So to be honest I don't feel the need to save up for something else DH values ... this would be it (for this year), since I value it too.

I finally got the exact figures from the upcoming sale ... 1K LESS than I thought. My math was spot on but apparently I started with an imaginary figure that was 1K higher than what we will actually be getting. Not sure how I messed up there, maybe wishful thinking LOL?

I'm still running the numbers but at this point my priority is clear, it's to lessen our monthly outgo as much as possible.

ETA: I just got a very interesting and prestigious and decently paid freelance job. BUT, it's a "test", I'm not even 100% sure I'll be paid for it. Hopefully if I do it well, there will be more to come in the future. So I'm trying my darndest to do it well and make this something I can count on. I also got an extra (badly paid but easy) assignment from the magazine I write a column for.

Thank you Writer88!!! Can you guess what I might have wished for?!

[bubbleepink]

Debtheaven
I am in your DS2's position: living away from home WISHING my parents would come visit me! I think that whichever option gets you to your son this year and causes the less amount of stress on your finances is the way to go. Although "your way" puts a lot more in the bank, I agree with your DH that "his way" gets you to a goal sooner. With that said, if you are going to stress about money "his way" then I say "YOUR WAY" is the way to go! Maybe you can make a minor adjustment to your way and celebrate when you get the loans down to 22 months to go, or when you reach a total debt of a round number to pay off. This way DH has to wait a bit for his celebration and you get yours just a little bit early.

I am doing this with my debt (I am at $38,018.51 right now) when I get it down to 35K then I will be giving myself a reward (don't know what yet). The reward will come a bit early in terms of paying of one debt but when I break it down like this is gives me more motivation to keep going.

It seems from your post that the money to see DS2 will be there either way you go. So I say Good luck! and have fun!

[bubbleepink]

UPDATE	04/17/2009	02/09/2011	02/19/2011	Diff Last Post	Total Diff
Student Loan	23,997.78	22,200.59	21,950.59	250.00	2,047.19
Car Loan	17,650.81	15,832.49	15,832.49	-	1,818.32
TOTAL	41,648.59	38,033.08	37,783.08	250.00	3,865.51

Bubbleepink 02/19/2011 $37,768.51 (4/17/2009 $41,648.59 N178, IPT7, IPT9)


I have updated my total starting balance to what my original SL balance + original car loan balance was when I got them both. I am not sure if this is how I should be doing it. I hope it does not cause too much confusion for you volunteers. I am using a spreadsheet that I found on the west board that I like a lot, but I don't know how to add in my new debt from the old one, so I left the original date of April 09 and just added the car loan of July 2010. I hope this works! I am testing to see how I like this format and working with this spreadsheet. I hope I can modify the SS so that I can post 2x a month after each payment.

[debtheaven]

Bubblee, thanks so much for your input! It makes me really want to visit DS2.

DH - How would it work if you pay the accounts 3K, put 2K into a vacation fund (even though it's not necessary, it's an important thing that should take priority) and put the rest on to the rental loan? How long then would that loan take to pay off?

In the end we are going to do what Idawn suggested (thanks Idawn!). We'll pay off the car, the personal loan for the earnest money, 3K to the accounts, 2K vacation fund and 6500 toward the rental loan. Alas we will still owe 4412 on the reno loan.

I won't "race" the reno loan or the boiler loan. I may decide to race the reno loan once the boiler is paid off but that's in 15 months.

ETA I'm still debating whether to shorten the term or lower the payment on what's left of the reno loan. I'll probably do a combination of both.