Rukh O'Rorke
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Post by Rukh O'Rorke on Jun 15, 2020 2:29:50 GMT -5
I knew you all would be pushing the 30 year loan. A $400/month payment would be nice, but I'm sooooo close to paying this thing off. 7 years is not that close. When does carrot go to college?
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CCL
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Post by CCL on Jun 15, 2020 2:45:56 GMT -5
If things go perfectly how behind does the 30 year put you? I feel like it frees up all of the stress and leaves your options open if shit hits the fan and everything needs to be replaced at once. Without prepaying? I don't know what the 30 year rates are, but assuming it is exactly the same as what I'm paying and there are zero closing costs (that won't happen). This is where I'd be with my mortgage balance January of 2023 (the 29 month mark) Current loan - $60,912 (could pay off with Roth contributions which are a little over 63K) 30 year loan - $89,154 But the reality is you're not going to keep the loan for 30 years. You'll pay it off early regardless, so the interest in that scenario doesn't matter. Refinancing is just to lighten your load and reduce the stress right now. Assuming the closing costs are minimal, there isn't any downside to it. You can still pay extra anytime you want. Or use the HELOC, except with that option, you could end up owing more than you do now. I get that you want to pay your house off, but it might do you more good to eliminate some of the stress you are living with right now. You have enough on your plate already. If you can at least eliminate some of the financial stress that's one less (major) thing to worry about. It frees up some of your energy for managing other areas of your life. You can always do something else later. It's not a permanent commitment.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jun 15, 2020 3:36:01 GMT -5
But, NO house payment seems even more freeing. I'm so sick of paying a mortgage. Then pay off with the Roth contributions. Not YM but might turn out a good decision.
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Lizard Queen
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Post by Lizard Queen on Jun 15, 2020 6:31:44 GMT -5
I really don't think it's wise to live off the HELOC. You may need it to fix the siding.
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giramomma
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Post by giramomma on Jun 15, 2020 6:58:11 GMT -5
But, NO house payment seems even more freeing. I'm so sick of paying a mortgage. Why are you sick of paying the mortgage? What it is about this particular bill? Not to be silly, but do you feel the same about other bills? Your mortgage isn't the only bill you have to pay, right?
Why are you favoring an illiquid asset of over a liquid one?
Here's one of the lessons I've observed in life: Making financial decisions based on emotions has the capacity to get one into to trouble. If nothing else, the housing run up in 2007/2008 should have taught us all that. Of course, you could be lucky and be the exception.
Personally, that's a risk I couldn't personally take.
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Lizard Queen
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Post by Lizard Queen on Jun 15, 2020 7:03:33 GMT -5
I actually don't mind having a small mortgage. They take care of the insurance and tax escrows, which I'd have to pay anyway. If I rented instead, I'd have that monthly expenses. Our PITI is less than rent for a 3 bedroom these days~$800. (Mostly consisting of property taxes.)
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Deleted
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Post by Deleted on Jun 15, 2020 7:09:55 GMT -5
How many acres do you own? Could you sell some? 15, but it's a long narrow strip. 350' wide and 2000' long, so there would be no road frontage. I bought it off an old farmer feuding with my neighbor on the other side, so he sold me a strip running along the edge of his property so I'd be a buffer...and to piss off his neighbor.
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Deleted
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Post by Deleted on Jun 15, 2020 7:11:46 GMT -5
I knew you all would be pushing the 30 year loan. A $400/month payment would be nice, but I'm sooooo close to paying this thing off. 7 years is not that close. When does carrot go to college? 8 years.
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Deleted
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Post by Deleted on Jun 15, 2020 7:13:58 GMT -5
But, NO house payment seems even more freeing. I'm so sick of paying a mortgage. Then pay off with the Roth contributions. Not YM but might turn out a good decision. That's one of my options at 29 months. I can't now because I owe 95K and only have 63K in Roth contributions.
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resolution
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Post by resolution on Jun 15, 2020 7:22:35 GMT -5
I knew you all would be pushing the 30 year loan. A $400/month payment would be nice, but I'm sooooo close to paying this thing off. This is a good, low cost option that gives you a lot of flexibility. If you took it, I have every confidence that you would still pay off the house very early and not come anywhere near a 30 year term. It would just make you comfortable for the 29 months and then you can change your withholding at work and start paying it down faster. I am doing the same thing with our residence, although my husband would love to just pay it off. We have a 30 year mortgage that costs $550 a month. I am paying $1000 a month on it as a compromise with my husband, but if we both lost our jobs due to covid, I can easily reduce it to the $550 with no stress or bother. I have done that for a few months here and there, like when we put a new roof on the house or we dug a new well. And then when the emergency is over, back to the $1000 a month. It should be paid off in the next couple of years, so it will be paid in under 15 years even though its a 30 year loan,
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Deleted
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Post by Deleted on Jun 15, 2020 7:34:25 GMT -5
But, NO house payment seems even more freeing. I'm so sick of paying a mortgage. Why are you sick of paying the mortgage? What it is about this particular bill? Not to be silly, but do you feel the same about other bills? Your mortgage isn't the only bill you have to pay, right?
Why are you favoring an illiquid asset of over a liquid one?
Here's one of the lessons I've observed in life: Making financial decisions based on emotions has the capacity to get one into to trouble. If nothing else, the housing run up in 2007/2008 should have taught us all that. Of course, you could be lucky and be the exception.
Personally, that's a risk I couldn't personally take.
All my other bills combined don't equal half my mortgage, not even close, and I don't want to be carrying a mortgage in retirement. I'm not concerned with what housing values do any more than I am about temporary stock market crashes. If they drop in half I still have a place to live with no payment. As for investing instead, I'm at the point where I'm thinking "how much money do I really NEED to be comfortable and happy in retirement?" I have been for a long time trying to keep up with the dual income 80-150K folks and seriously...why? According to my Phil Script, a lump sum investment of $525,000.00 bearing an annual return of 7% could grow to $1,353,730.43 in 14 years! So, even with never adding another dime and making 7%, I overshoot my goal of 1.2 million...which leaves me pretty comfy, and I'm sure I will keep adding something, especially after the mortgage is gone.
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resolution
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Post by resolution on Jun 15, 2020 7:38:53 GMT -5
Why are you sick of paying the mortgage? What it is about this particular bill? Not to be silly, but do you feel the same about other bills? Your mortgage isn't the only bill you have to pay, right?
Why are you favoring an illiquid asset of over a liquid one?
Here's one of the lessons I've observed in life: Making financial decisions based on emotions has the capacity to get one into to trouble. If nothing else, the housing run up in 2007/2008 should have taught us all that. Of course, you could be lucky and be the exception.
Personally, that's a risk I couldn't personally take.
All my other bills combined don't equal half my mortgage, not even close, and I don't want to be carrying a mortgage in retirement. I'm not concerned with what housing values do any more than I am about temporary stock market crashes. If they drop in half I still have a place to live with no payment. As for investing instead, I'm at the point where I'm thinking "how much money do I really NEED to be comfortable and happy in retirement?" I have been for a long time trying to keep up with the dual income 80-150K folks and seriously...why? According to my Phil Script, a lump sum investment of $525,000.00 bearing an annual return of 7% could grow to $1,353,730.43 in 14 years! So, even with never adding another dime and making 7%, I overshoot my goal of 1.2 million...which leaves me pretty comfy, and I'm sure I will keep adding something, especially after the mortgage is gone. So in other words, you won't be carrying a mortgage in retirement even if you refinance to 30 years. Because you will have the resources to pay it off immediately when you start to access your retirement funds.
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azucena
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Post by azucena on Jun 15, 2020 7:43:35 GMT -5
I don't follow the 17 and 29 months and how that relates to college and/or the mortgage, but I haven't had my coffee yet.
I don't think you want to pull from your Roth even if you can and even if it won't mess with aid. I'd say the same thing in a few years when you reach the possibility of total payoff. You can't ever put that money back in Roth.
I'm not sure I understand how much liquid savings you have as emergency fund. Being a single parent with the economy going downhill, you want to keep sitting on as much cash as possible.
So I think that leaves the option of refinancing, particularly if you can do it cheaply (ie low to no closing costs). And do the 30 yr option and if your emergency fund is comfortable, keep paying the current mortgage payment minus the shortfall to stay as close to 'on track' as possible. Step that back if you need to stash a few more months cash initially.
Somewhere lately you got in the habit of spending a bit more freely than you used to. See if you can figure that out. We all do it from time to time, but I worry with DS heading to college that you're going to try to set him up with all of the dorm stuff that he wants instead of focusing on what he really needs. It's okay to say no, I can't help you with that right now, but let's talk about if you need it and how you can figure out a way to get it yourself. This is the turning point where his money problems become his to own including any tuition shortfalls.
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Deleted
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Post by Deleted on Jun 15, 2020 8:03:56 GMT -5
I don't follow the 17 and 29 months and how that relates to college and/or the mortgage, but I haven't had my coffee yet. I don't think you want to pull from your Roth even if you can and even if it won't mess with aid. I'd say the same thing in a few years when you reach the possibility of total payoff. You can't ever put that money back in Roth. I'm not sure I understand how much liquid savings you have as emergency fund. Being a single parent with the economy going downhill, you want to keep sitting on as much cash as possible. So I think that leaves the option of refinancing, particularly if you can do it cheaply (ie low to no closing costs). And do the 30 yr option and if your emergency fund is comfortable, keep paying the current mortgage payment minus the shortfall to stay as close to 'on track' as possible. Step that back if you need to stash a few more months cash initially. Somewhere lately you got in the habit of spending a bit more freely than you used to. See if you can figure that out. We all do it from time to time, but I worry with DS heading to college that you're going to try to set him up with all of the dorm stuff that he wants instead of focusing on what he really needs. It's okay to say no, I can't help you with that right now, but let's talk about if you need it and how you can figure out a way to get it yourself. This is the turning point where his money problems become his to own including any tuition shortfalls. My emergency fund is 15K (plus I guess there's 7K or so sitting in a taxable account I could tap). I have an additional $12,600 that I saved specifically to extend child support and cover the gap before I could reduce retirement savings. Spending was two cars in one year and all the associated costs with them (insurance, licensing, tax), and I bought a "new" riding mower last year for 3K. As for spending a ton on my kid in the dorm...I doubt it. What would I get besides maybe a mini fridge, microwave and sheets? He would happily go with just his hiking backpack full of clothes and his computer. My house doesn't even have drapes 20 years later. LOL
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laterbloomer
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Post by laterbloomer on Jun 15, 2020 8:27:41 GMT -5
I knew you all would be pushing the 30 year loan. A $400/month payment would be nice, but I'm sooooo close to paying this thing off. $400 is going to be a lot less in 10 years than it is now. But I'm like you. The idea of paying it all off is really attractive.
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oped
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Post by oped on Jun 15, 2020 8:28:20 GMT -5
Why are you sick of paying the mortgage? What it is about this particular bill? Not to be silly, but do you feel the same about other bills? Your mortgage isn't the only bill you have to pay, right?
Why are you favoring an illiquid asset of over a liquid one?
Here's one of the lessons I've observed in life: Making financial decisions based on emotions has the capacity to get one into to trouble. If nothing else, the housing run up in 2007/2008 should have taught us all that. Of course, you could be lucky and be the exception.
Personally, that's a risk I couldn't personally take.
All my other bills combined don't equal half my mortgage, not even close, and I don't want to be carrying a mortgage in retirement. I'm not concerned with what housing values do any more than I am about temporary stock market crashes. If they drop in half I still have a place to live with no payment. As for investing instead, I'm at the point where I'm thinking "how much money do I really NEED to be comfortable and happy in retirement?" I have been for a long time trying to keep up with the dual income 80-150K folks and seriously...why? According to my Phil Script, a lump sum investment of $525,000.00 bearing an annual return of 7% could grow to $1,353,730.43 in 14 years! So, even with never adding another dime and making 7%, I overshoot my goal of 1.2 million...which leaves me pretty comfy, and I'm sure I will keep adding something, especially after the mortgage is gone. And frankly more than capable of making a 400 payment in retirement IF it came to that. How would the new 30 year mortgage compare with your other bills?
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justme
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Post by justme on Jun 15, 2020 8:37:53 GMT -5
I don't follow the 17 and 29 months and how that relates to college and/or the mortgage, but I haven't had my coffee yet.I don't think you want to pull from your Roth even if you can and even if it won't mess with aid. I'd say the same thing in a few years when you reach the possibility of total payoff. You can't ever put that money back in Roth. I'm not sure I understand how much liquid savings you have as emergency fund. Being a single parent with the economy going downhill, you want to keep sitting on as much cash as possible. So I think that leaves the option of refinancing, particularly if you can do it cheaply (ie low to no closing costs). And do the 30 yr option and if your emergency fund is comfortable, keep paying the current mortgage payment minus the shortfall to stay as close to 'on track' as possible. Step that back if you need to stash a few more months cash initially. Somewhere lately you got in the habit of spending a bit more freely than you used to. See if you can figure that out. We all do it from time to time, but I worry with DS heading to college that you're going to try to set him up with all of the dorm stuff that he wants instead of focusing on what he really needs. It's okay to say no, I can't help you with that right now, but let's talk about if you need it and how you can figure out a way to get it yourself. This is the turning point where his money problems become his to own including any tuition shortfalls. Something to do with FAFSA. I think it looks back 2 years right now. So aid for this year was based on 2018 taxes. Graduation in 4 years so that would be on 2022 taxes.
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Deleted
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Post by Deleted on Jun 15, 2020 8:46:53 GMT -5
All my other bills combined don't equal half my mortgage, not even close, and I don't want to be carrying a mortgage in retirement. I'm not concerned with what housing values do any more than I am about temporary stock market crashes. If they drop in half I still have a place to live with no payment. As for investing instead, I'm at the point where I'm thinking "how much money do I really NEED to be comfortable and happy in retirement?" I have been for a long time trying to keep up with the dual income 80-150K folks and seriously...why? According to my Phil Script, a lump sum investment of $525,000.00 bearing an annual return of 7% could grow to $1,353,730.43 in 14 years! So, even with never adding another dime and making 7%, I overshoot my goal of 1.2 million...which leaves me pretty comfy, and I'm sure I will keep adding something, especially after the mortgage is gone. And frankly more than capable of making a 400 payment in retirement IF it came to that. How would the new 30 year mortgage compare with your other bills? $380 - All insurance (3 autos, home, 2 life and umbrella) $225 - Property taxes (although I usually get almost half that back) $300 - LP, electric, garbage, 3 phones and TV.
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Deleted
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Post by Deleted on Jun 15, 2020 8:51:23 GMT -5
I don't follow the 17 and 29 months and how that relates to college and/or the mortgage, but I haven't had my coffee yet.I don't think you want to pull from your Roth even if you can and even if it won't mess with aid. I'd say the same thing in a few years when you reach the possibility of total payoff. You can't ever put that money back in Roth. I'm not sure I understand how much liquid savings you have as emergency fund. Being a single parent with the economy going downhill, you want to keep sitting on as much cash as possible. So I think that leaves the option of refinancing, particularly if you can do it cheaply (ie low to no closing costs). And do the 30 yr option and if your emergency fund is comfortable, keep paying the current mortgage payment minus the shortfall to stay as close to 'on track' as possible. Step that back if you need to stash a few more months cash initially. Somewhere lately you got in the habit of spending a bit more freely than you used to. See if you can figure that out. We all do it from time to time, but I worry with DS heading to college that you're going to try to set him up with all of the dorm stuff that he wants instead of focusing on what he really needs. It's okay to say no, I can't help you with that right now, but let's talk about if you need it and how you can figure out a way to get it yourself. This is the turning point where his money problems become his to own including any tuition shortfalls. Something to do with FAFSA. I think it looks back 2 years right now. So aid for this year was based on 2018 taxes. Graduation in 4 years so that would be on 2022 taxes. Yes, except graduation in 4 years would take us to using 2021 taxes. Freshman year - 2018 taxes Sophomore - 2019 Junior - 2020 Senior - 2021 I added a year on for good measure in case he has to go 5, but I'm rethinking that one.
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justme
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Post by justme on Jun 15, 2020 8:55:50 GMT -5
Something to do with FAFSA. I think it looks back 2 years right now. So aid for this year was based on 2018 taxes. Graduation in 4 years so that would be on 2022 taxes. Yes, except graduation in 4 years would take us to using 2021 taxes. Freshman year - 2018 taxes Sophomore - 2019 Junior - 2020 Senior - 2021 I added a year on for good measure in case he has to go 5, but I'm rethinking that one. I wanna say ugh maths it's early. But I'm also crashing on a work thing that's all math that's dealing with millions of dollars so I probably shouldn't say that
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Tiny
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Post by Tiny on Jun 15, 2020 9:37:59 GMT -5
Will you be able to refinance (based on your income after childsupport ends)?? Mortgage lenders are weird about income to debt ratios and the stability of income and all sorts of other stuff.
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murphath
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Post by murphath on Jun 15, 2020 9:50:03 GMT -5
I'm a big fan of community colleges and am very familiar with how they work here in California. Would a CC be an option for your son so that he could live at home?
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oped
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Post by oped on Jun 15, 2020 10:21:36 GMT -5
Nope. He got a great scholarship and grants and is going to a good school for engineering.
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mary2029
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Post by mary2029 on Jun 15, 2020 10:28:01 GMT -5
Why are you using math against you? You are estimating that the market will go up 7% in the next 14 years, but don't want to borrow cheaper money at under 4%? You already have a great nest egg that will see you in retirement and you know that you will be saving more, but you don't want to impact your retirement negatively with a continuing bill? Plus you are not including social security. Even if you ignore the math, many others in this forum and probably your life have stated that their financial net worth have only increased in retirement... for example Phil and Athena. Do you think that you will be significantly different?
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jun 15, 2020 10:37:22 GMT -5
Then pay off with the Roth contributions. Not YM but might turn out a good decision. That's one of my options at 29 months. I can't now because I owe 95K and only have 63K in Roth contributions. oh - I misunderstood then. You've boxed yourself into a corner, with the mandatory high 401k contributions for the grants, and not wanting to do a 30 year mortgage. In this scenario - getting a second job wouldn't really help because of the grants. So - how close to the bone is a budget based on not refinancing? And can you live on that for 7 years? The other extreme is to refinance and take money out - could invest that difference and hopefully in 7-10 years - that extra would grow to pay off the mortgage! That could be a fun game - if you win . The other is the take the 63k roths contributions NOW, pay on the mortgage, then you have 22k? left? That could be paid off more quickly than the 29 months as so much less interest would accrue - maybe 18 months? if you could scrap extra money to put towards that? That is at least a short enough period of time to really cut the budget to the bone to make it. That would be paid off much more quickly than the other way round. Would that money earn more in the roth account than it saves you? Really depends on the market. I wouldn't want to bet on the market being normal in the next few years however, but there is no timing that beast. At this point - you have to give up something - what is going to hurt the least? And/or what financial milestone is most important to you? Which scenario is going to give you the most 'head space' out of financial consideration? Let you sleep like a baby?
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jun 15, 2020 10:39:47 GMT -5
How many acres do you own? Could you sell some? 15, but it's a long narrow strip. 350' wide and 2000' long, so there would be no road frontage. I bought it off an old farmer feuding with my neighbor on the other side, so he sold me a strip running along the edge of his property so I'd be a buffer...and to piss off his neighbor. oh - is the house and buildings new? or pre-existing? Did the buffer work? Did the neighbor get pissed off? If I was having touble with a neighbor, I'd be glad of a buffer myself!
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Deleted
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Post by Deleted on Jun 15, 2020 10:56:37 GMT -5
15, but it's a long narrow strip. 350' wide and 2000' long, so there would be no road frontage. I bought it off an old farmer feuding with my neighbor on the other side, so he sold me a strip running along the edge of his property so I'd be a buffer...and to piss off his neighbor. oh - is the house and buildings new? or pre-existing? Did the buffer work? Did the neighbor get pissed off? If I was having touble with a neighbor, I'd be glad of a buffer myself! I bought the land in 94, built the barn in 95 and house in 99/00. The neighbors have all died now. 😢
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jun 15, 2020 11:03:33 GMT -5
I don't follow the 17 and 29 months and how that relates to college and/or the mortgage, but I haven't had my coffee yet. I don't think you want to pull from your Roth even if you can and even if it won't mess with aid. I'd say the same thing in a few years when you reach the possibility of total payoff. You can't ever put that money back in Roth. I'm not sure I understand how much liquid savings you have as emergency fund. Being a single parent with the economy going downhill, you want to keep sitting on as much cash as possible. So I think that leaves the option of refinancing, particularly if you can do it cheaply (ie low to no closing costs). And do the 30 yr option and if your emergency fund is comfortable, keep paying the current mortgage payment minus the shortfall to stay as close to 'on track' as possible. Step that back if you need to stash a few more months cash initially. Somewhere lately you got in the habit of spending a bit more freely than you used to. See if you can figure that out. We all do it from time to time, but I worry with DS heading to college that you're going to try to set him up with all of the dorm stuff that he wants instead of focusing on what he really needs. It's okay to say no, I can't help you with that right now, but let's talk about if you need it and how you can figure out a way to get it yourself. This is the turning point where his money problems become his to own including any tuition shortfalls. If child support is over - can dad outfit the dorm, spending money, etc?
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Deleted
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Post by Deleted on Jun 15, 2020 11:03:53 GMT -5
Will you be able to refinance (based on your income after childsupport ends)?? Mortgage lenders are weird about income to debt ratios and the stability of income and all sorts of other stuff. Hadn't really thought about that, but they did borrow me 208K in 2009 and 184K in 2012. I would think 90K or so wouldn't cause them to bat an eye even with 12K less income. It's probably not even that much less because I'm making more than I was then. I'm mostly concerned about closing costs on a 30 year since its not part of the Rapid Refi deal. They are typically high in MN due to all this stupid title crap that costs a fortune. I think usually over 2K to do it if it needs appraisal too.
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Deleted
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Post by Deleted on Jun 15, 2020 11:17:25 GMT -5
I don't follow the 17 and 29 months and how that relates to college and/or the mortgage, but I haven't had my coffee yet. I don't think you want to pull from your Roth even if you can and even if it won't mess with aid. I'd say the same thing in a few years when you reach the possibility of total payoff. You can't ever put that money back in Roth. I'm not sure I understand how much liquid savings you have as emergency fund. Being a single parent with the economy going downhill, you want to keep sitting on as much cash as possible. So I think that leaves the option of refinancing, particularly if you can do it cheaply (ie low to no closing costs). And do the 30 yr option and if your emergency fund is comfortable, keep paying the current mortgage payment minus the shortfall to stay as close to 'on track' as possible. Step that back if you need to stash a few more months cash initially. Somewhere lately you got in the habit of spending a bit more freely than you used to. See if you can figure that out. We all do it from time to time, but I worry with DS heading to college that you're going to try to set him up with all of the dorm stuff that he wants instead of focusing on what he really needs. It's okay to say no, I can't help you with that right now, but let's talk about if you need it and how you can figure out a way to get it yourself. This is the turning point where his money problems become his to own including any tuition shortfalls. If child support is over - can dad outfit the dorm, spending money, etc? He will help him if he needs it. Je already offered to continue paying a reduced support for a little while, but I refused it and told him to send money to DS instead. Don't think the kid will need much though. He has been saving half his pay and got a lot of money for graduation. Plenty for spending money for at least the first year. Probably a couple if he lays off the gaming.
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