Dear Steve,
I am a potential first-time homebuyer interested in a co-op located just a few blocks from where I work. Because a co-op is actually a stock purchase, I am concerned that buying one is riskier than a condo, given all the stock-market trouble. If there’s a stock market crash, wouldn’t the stock be affected? I’d hate to get wiped out and end up homeless!
— (more…)
Archive for March, 2009
Credit damage may last beyond 7 years
Saturday, March 28th, 2009 Dear Dr. Don,
When a negative account on my credit report is more than 7 years old, why does it continue to show on my credit report? A divorce put me in a terrible financial position, and even after all these years, and even after paying the bad debts off, they still remain on my credit report. How can I get them off?
— Denise Denouement
Dear Denise,
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Stay in home if upside down
Friday, March 27th, 2009 Dear Debt Adviser,
What information or advice can you give us in regard to an upside-down home loan? We purchased our home in Fresno, Calif., just a few months before the beginning of the housing price burst in 2007 and put a 20 percent down payment on $600,000. Our home is now devalued to $400,000, and we are upside down by $60,000. Are there any programs or relief for these situations?
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Don’t use equity for home improvement
Thursday, March 26th, 2009 Dear Dr. Don,
We received a decent bonus this year and are trying to figure out the most effective way to use it. We recently purchased a house and the homeowners association requires that we landscape the yard by May 1 of this year. It is a fairly large yard and will require the whole bonus amount just for the basics.
Also, due to car troubles, we have nearly maxed out our main credit card and have taken (more…)
Determining theft loss deductions
Thursday, March 26th, 2009 Dear Tax Talk,
My 83-year-old father has been a victim of Internet scammers. He has cashed out all of his retirement accounts (and now has IRS liens), borrowed against insurance polices, used payday lenders, avoided paying bills and is now ready to file bankruptcy and move in with me.
I have spent over a year trying to have a guardian appointed for him. I finally have the documents necessary to make this (more…)
Biweekly mortgage plans too inflexible
Wednesday, March 25th, 2009 Dear Dr. Don,
I am told by my mortgage holder that by paying $120 a month more, I will achieve the same principal and interest payments as though I were paying my mortgage every two weeks.
I have a $251,182.30 outstanding on a 30-year, fixed-rate mortgage at 5.125 percent. The monthly payment is $1,433. Is the lender correct, or should I be looking at a biweekly mortgage?
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Bankruptcy filing slows refinancing
Wednesday, March 25th, 2009 Dear Bankruptcy Adviser,
I filed for bankruptcy and want to refinance my mortgage from an (adjustable rate mortgage) to a 30-year fixed. I want to lower my interest rate and lower my payment. My mortgage company says they can’t do anything while I’m in bankruptcy. How do I get a plan rate reduction or get a lower payment? I’ve asked them to modify my loan and they say they can’t. Can a loan be modified once (more…)
Bank’s mortgage numbers look funny
Tuesday, March 24th, 2009 Dear Dr. Don,
Why is it when I print out an amortization schedule, it shows that my loan balance is a different amount than the loan balance reflected on the transaction history of the actual payments I made to the lender?
My loan originated in June 2004. It was a $200,000, 15-year, fixed-rate mortgage at 5.25 percent. The monthly payment is $1,607.76.
The amortization schedule shows our loan balance
Figuring losses on rental property
Tuesday, March 24th, 2009 Dear Tax Talk,
I know about the $25,000 cap on net losses for rental property, and it’s my understanding that the $25,000 is per person, regardless of the number of properties I own. What happens if there is one rental property owned by two people? It doesn’t seem reasonable that the deduction is still $25,000 per person (for a total of $50,000 on one property).
— Bob (more…)
R.A.s not taxed on room, board
Tuesday, March 24th, 2009 Dear College Money Guru,
My daughter has been a resident adviser during her sophomore and junior college years. This year, apparently, (because) two semesters of being an R.A. show up for tax year 2008, our accountant said she would have to file and pay taxes on approximately $9,000 — free room and board for being an R.A.– plus $2,400 of earned income.
My two other college students qualify for Pell
Climb mountain of debt
Tuesday, March 24th, 2009 Dear Debt Adviser,
Hi, my question is I have over $40,000 in credit card debt. I have a steady job and have not missed a payment, but I am unable to keep up with my payments. I have a wife and two kids to support and a mortgage. Should I call my credit card company to, maybe, settle my debt?
— Tim
Dear Tim,
Forty thousand (more…)
Parents legally can cash child’s bond
Tuesday, March 24th, 2009 Dear Dr. Don,
I have four Series EE savings bonds held in my 16-year-old daughter’s name. How do I cash them?
— Patricia Ponders
Dear Patricia,
As the parent of a minor child, you have the ability to cash the bonds for your child.
Here’s what the TreasuryDirect Web page “Redeeming EE/E and I Bonds under Special