Mortgage Considerations

Posted on February 8th, 2008 in Home, My Progress by planner

With mortgage rates as low as they have been many people have been refinancing.  The past several years have been consistently low rates.  Lately we have been considering taking a home equity loan to consolidate some other bills.  Some of the things we are considering are:

Tax deductible interest.  Mortgage interest, and home equity loan interest, is tax deductible.  But our mortgage is low enough that even when itemizing the extra deduction compared to the standard is small.  Having an equity loan would make more of the interest we are paying anyway deductible.  The question is how much.

Interest rates.  With rates as low as they are we could get an equity loan lower than one of our car loans and lower than one of our student loans.  That is a pretty easy choice.  But the other student loan has an even lower rate, and the other car loan is pretty much in line with the equity rate we are looking at.

Payment terms and total interest.  Student loans are set out at a 10 year payment schedule.  Our car loans have less than 3 years left.  I’d hate to stretch out the payments too much, especially since longer term loans carry higher rates, and longer terms means higher total interest paid.

Cash flow and flexibility.  The longer the loan term the lower the payment.  It always feels nice to have more room between what you bring in and what you have to pay out.  Either way we could plan out our expenses as much as we need.  The difference is with a home equity loan we can consolidate fixed payments over a term, whereas now we have payments changing over the next couple of years as different loans are paid off.  It’s also easier to pay one loan at one place than several spread across lenders, but with online and automatic payments that’s not an issue for us.

Busy (and Expensive) Holidays

Posted on December 20th, 2007 in Home, Spending / Shopping by planner

Things have been hectic through the holiday season.  Thanksgiving was busy enough and nothing has let up with all of the preparations for Christmas.  We still have some last minute gifts to get.  We have to sort out family schedules.  Then Christmas and New Years will be here.  At least the kids activities and schools have a break.  I have some time off too!

The end of the year is a good time for a big money review.  There are tons of opportunities to use your money.  Holiday gifts are a good way to spend a bunch.  Charitable donations are another good way to share your wealth.  Retirement contributions can be made.  This year we can almost figure out our tax situation to help decide what moves make sense over the next week.  It looks like there will be AMT relief again.  We’ve never had to worry about that but it is nice to know that other people will be able to plan a bit earlier if that does go through.

With all of the activity going on I am already feeling behind here, in both my blog and my plan.  Through the end of the year I am hoping to get another credit card post, a first good look at college savings plans, new years resolutions, and some other odds and ends.