Dear Dr. Don,
My husband, 47, and I, 44, have no kids and are absolutely debt-free except for our home. We’ve had a $100,000 home equity line of credit in place since 2003. We currently have about $140,000 equity in our home. We plan to stay in our home forever.
We’ve heard about how unused HELOCs are being taken away, so we recently applied the $100,000 to our mortgage principal and had the bank recalculate (more…)
Archive for the ‘Today's stories’ Category
Shrewd moves net couple $500 a month
Friday, April 3rd, 2009Tags: couple, month, moves, Shrewd
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Share values may differ at conversion
Thursday, April 2nd, 2009
Dear Dr. Don,
I’m writing to ask about holding Class B shares of mutual funds long term. All sources of information I’ve found claim that the Class B shares convert to Class A shares after six to eight years. In actuality, the Class B shares are sold and then Class A shares are purchased. So, at conversion, my B shares become A shares.
Shouldn’t the number of newly minted A shares be equal to the number (more…)
Tags: conversion, differ, Share, values
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Paying tax on canceled debt
Thursday, April 2nd, 2009
Dear Tax Talk,
I renegotiated loans on a second home and a rental property, and the bank reduced the amounts added to principal from negative amortization. The loans are still more than the original amount. I received a 1099-C. Is this actually taxable income to me?
— Bill
Dear Bill,
The IRS has never seen the level of (more…)
Tags: canceled, debt, Paying
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Life happens, and so does bankruptcy
Thursday, April 2nd, 2009
Dear Bankruptcy Adviser,
Life happens. I am separated from my wife but continue to pay for her car (it’s in my name, too) and support for my son. Our house got foreclosed on Jan. 2. I haven’t paid a credit card bill in over four months. I probably have around $40,000 in credit card debt. I make good money. I have told credit card companies I couldn’t pay and got a “too bad” kind of response, so I’ve been ignoring (more…)
Tags: Bankruptcy, does, happens, Life
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Divorce doesn’t end debt
Wednesday, April 1st, 2009
Dear Debt Adviser,
My fiancee and I just got our credit reports and are planning on buying a house. To her surprise, her ex still had not taken her name off an account with a $9,000 balance and is using (another) card that is in her name only. They have been divorced for nine years! Help!
— Ted
Dear Ted,
Divorcing a spouse (more…)
Tags: debt, Divorce, doesn
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Mortgage deduction savings exaggerated
Wednesday, April 1st, 2009
Dear Dr. Don,
I still owe $100,000 on my house at an interest rate of 5.88 percent. I would like to pay off the mortgage, but people keep insisting that I shouldn’t because I’ll lose the mortgage interest deduction.
Do I really save money in the end? I’m in the 25-percent bracket. I feel I could save more by just paying it off and then saving the mortgage payment. The loan is for 15 years. How long can (more…)
Tags: deduction, exaggerated, mortgage, Savings
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Co-op shares not tied to stock market
Tuesday, March 31st, 2009
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…)
Tags: market, shares, stock, tied
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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,
(more…)
Tags: beyond, Credit, damage, last, years
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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?
(more…)
Tags: down, home, Stay, upside
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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…)
Tags: equity, home, improvement
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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…)
Tags: deductions, Determining, loss, theft
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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?
(more…)
Tags: Biweekly, inflexible, mortgage, plans
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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…)
Tags: Bankruptcy, filing, refinancing, slows
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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
Tags: Bank, funny, look, mortgage, numbers
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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…)
Tags: Figuring, losses, property, rental
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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
Tags: board, room, taxed
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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…)
Tags: Climb, debt, mountain
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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
Tags: bond, cash, child, legally, Parents
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9 ways to stretch your holiday budget
Wednesday, November 12th, 2008The study says 44.2 percent of consumers will go online to shop at some point during this holiday shopping season, about the same as in 2007. On average, consumers will make one third — 33.6 percent — of their holiday purchases online, up from 30.2 percent last year.
Perhaps a sign of poor economic times, each shopper is expected to spend $832.36 on holiday merchandise, a paltry 1.9 percent increase over the $816.69 spent last year on average.
Maximize your spending power:
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529 plan: Moves to make now
Tuesday, October 21st, 2008The notice at the bottom of every advertisement for a 529 savings plan includes the warning: “Accounts may lose value.” Millions of disheartened parents are now all-too-aware of just how accurate that statement is as they open their September account statements and see that their 529 savings accounts have, in fact, lost money.- advertisement -
The stock market swoon of recent weeks has not only caused account values to drop but in many cases has created losses, as balances drop below original contributions.
So what are parents to do as they fret about losing money in their college savings accounts at the same time that college costs continue their relentless rise? Here are some suggestions, based on the current age of your child.
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‘Seeking fun-loving, SF, high credit score’
Wednesday, August 20th, 2008If money and relationships are an uncomfortable mix, then credit and romance are downright strange bedfellows.- advertisement -
“You may say you know everything about a person, but you probably don’t know anything about his credit record,” says Adam Levin, founder of Credit.com.
Now, a frequently aired TV commercial featuring a forlorn young husband forced to live with his in-laws because he was clueless about his bride’s abysmal credit is aiming to spur young lovers to share credit scores.
Of course, the commercial’s sponsor, the Web site freecreditreport.com, is hoping to rev up its credit information sales, too. Romantic partners are a big, untapped market.
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Buying a home in a tax lien sale
Saturday, August 16th, 2008As foreclosures continue to pile up, so do unpaid property taxes. That’s an opportunity if you’re willing to wade into the arcane world of property tax lien sales. Before you do, however, understand the risks that come with these little-known investments.- advertisement -
“Every year, $7 (billion) to $10 billion in property taxes go delinquent,” says Howard Liggett, executive director of the National Tax Lien Association in Pensacola, Fla., a trade association of investors, tax collectors and service providers involved in tax lien sales. “The subprime mortgage crisis has spiked those numbers. For example, four of the 67 counties in Florida saw spikes of 30 percent to 33 percent in the number of tax liens offered for sale last year.”
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Fame & Fortune: Danica Patrick
Tuesday, August 12th, 2008She published her autobiography, “Danica — Crossing the Line,” two years ago, and this year became the first woman to win an IndyCar race, bringing home first place in the Indy Japan 300.- advertisement -
At 26, professional race car driver Danica Patrick is now playing with the big boys, finishing 5,894 seconds ahead of fellow race car driver, Helio Castroneves, and joining the gender-crossing ranks of drag racer Shirley Muldowney.
Growing up in the Midwest, Patrick was a high school cheerleader before first tasting racing success when she began local Go-Karting in 1992 at Sugar River Raceway in Wisconsin, later moving on to win national Go-Kart titles.
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ID thieves are targeting home equity lines
Monday, August 4th, 2008Have you checked your home equity line of credit lately?- advertisement -
If not, you probably should. Even if you’ve never used a home equity line of credit, or HELOC, it’s a good idea to check your three credit reports (Equifax, Experian and TransUnion) to make sure identity thieves haven’t opened one in your name.
According to the FBI, canny con artists are increasingly draining the equity of unsuspecting homeowners by tapping into their home equity lines of credit. The more equity you have in your home, and the less vigilant you are about monitoring your finances, the greater the risk that thieves could drain the equity from your home — or worse, sell it out from under you.
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Can’t sell? Try swapping your home
Saturday, August 2nd, 2008About a year and a half ago, Tom Runge and his wife, Cathy Woods, put their Auburn, Wash., home up for sale. Woods had taken a new telecommuting-friendly position and the couple planned to move to Portland, Maine, where they could more easily afford some investment property.- advertisement -
The situation seemed ideal, but there was just one problem: Their four-bedroom Washington house didn’t sell.
That was no surprise in this tough market. According to the National Association of Realtors, the rate of existing home sales in June 2008 was 15.5 percent lower than it was in June 2007, while median existing-home prices fell by about 6 percent compared to the previous June.
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