When I lived in the UK I had a 'virgin one' mortgage through the royal bank of scotland. It was a credit card, savings and checking account all in one. I dont remember any fees. Mortgages work a little differently over there, but I basically could borrow up to my full mortgage if I needed to so it offered me a great deal of flexibility as well as saving a ton of cash.
My alma mater had a culinary school, and it turned out to be a nice way to get a fancy meal at college persons price. I would endorse the experience, although the atmosphere wasn't top knotch.
Amazon does that periodically with the KitchenAid hand blenders, a food blog I read pointed it out once. They're generally $45-60 but every so often they'll drop it just for a day or so. If you really want one, just keep an eye on it and wait.
A change of scenery can make a huge difference. When I'm stressed out, hanging around my room or my office is the worst thing I can do. All the familiar stress triggers are there -- mountains of files, tons of unfinished projects, etc.
But when I move to a different venue, like a local coffee house or Borders, I get a lot done because I can focus on the project at hand instead of thinking about all the other things I need to do.
Yes, you are the one!! I've reviewed the video numerous times -- all the details of the HELOC payments (in and out) are not fully explored; that is, you don't really see the precise cost of the interest charges for comparison purposes.
I think they are playing games with the time value of money, presenting the LOC monthly interest as miniscule compared to the gigantic interest associated with the mortgage but if you compounded everything out (using PV and FV functions, etc.), you would see a different picture. Again, the entire 10 years or so are not shown, making it harder to dissect the program. The video viewer is disencouraged from taking pencil (or pen) to paper; or presumably, keyboard to spreadsheet.
I guess the idea is that you are incurring a small interest charge that is calculated on a smaller balance to pay off a larger loan that is set for a 30 year time period. Once the first of the month passes, you (via your mortgage) will have to pay the entire month's interest whereas with the LOC you are just paying on the days you have a balance. But if you prepay the mortgage, you are "cancelling" the interest not because of timing but because you are lowering the loan balance.
I think you should consider the interest rate for the mortgage, the interest rate for the HELOC, and the time that you would hold the outstanding balance on the HELOC. Crunch the numbers and see what happens (or send them to me). If you are borrowing at a higher rate to pay off a lower rate, though, then it's unlikely to be beneficial.
Now, having a HELOC or LOC is not a bad idea to have in case of emergency or possibly, if you want to borrow at a lower rate to pay off a higher rate balance. (Some folks may call it robbing Peter to pay Paul or they may call it cash management).
It was Jessica (not me, Julie). Btw, I have tried culinary schools and mystery shopping. Thanks for the reminder about the culinary experience -- some coworkers and I did this when we worked close to a community college many years ago (though reservations could be hard to come by). Still I should try it again though the one that's nearest to me know is 30 miles or so away.
Also, I have tried the mystery shopping. I completed a training assignment at a retail store and everything was fine and the next assignment I was supposed to be paid for. But then I was told to go on another training assignment, this time at a bank for no compensation. Perhaps if I would have gone on that one (I pointed out to the owner that I had completed their requirements as outlined to me when I signed up), I would have actually gotten paid at some point but I didn't stick around.
<rant>Oh, man. I signed up to do that a while back. I was assigned to go to a bank and pretend that I had all kind of inheritance money that I needed to invest. I called the bank and set up an appointment, and then the lady called and had to delay because her mother was sick. Then her mom died, and she had to delay again because she was in charge of the funearl arrangements.
By the time she was ready to meet with me, I felt so bad about the entire thing (lying and wasting her time, even though I know it was her bank that set up the whole thing to test their own service) that I just couldn't go through with it.
But they never offered me a restaurant!!!
</rant>
Julie, thanks for posting this. We have a local culinary school in Seattle that offers incredible meals at great prices. The only downside is that their hours can be wacky, but it's worth making the effort to go.
I hadn't thought about mystery shopping! I'll have to add it to my list of ideas! I already have an article in the works on haircuts at beauty schools... =)
Do you mind if I ask what mystery shopping company you use?
I confess, I have been -The CHAMELEON. I am glad you are ambivalent on this one, because this one is a struggle. Great bloggers say that to get noticed you have to engage in conversation and comment on other blogs. It is hard to get noticed in the blogosphere and commenting provides an introduction. But it is important to have something meaningful to say within in the comments, otherwise they just look like spam.
Great idea on the Culinary school, I used to go to a hair dresser's school to get super cheap hair cuts.
Also, you all should highlight mystery shopping. I have done it for 10 years and my family and I eat out will little to cost for us. It is fun, it is easy (except at the beginning - there is a lot of work on the front end to fill out forms and applications) and a family can eat out with out busting the budget.
If you click on Jess's hyperlink that takes you to her beauty blog, you will see that you have neglected to include her particular commentor category in your post; the Incredibly Beautiful Woman with Good Blog of Her Own and Nice Things to Say About Us category.
I have been in the position that to receive help from Human Services, I have had to lie like crazy! Is it wrong? To some of you, it might be. But when it comes to my kids...I'll do whatever it takes to make sure they have food. The system is totally screwed up. Even the case workers will tell you that you have to lie to get help! I've been honest about my situation before... and either I get denied help or I get the "help" of $4.00 a month food stamps. Explain to me what $4.00 a month is going to do for 3 hungry kids???
Planned parenthood...if you lie to them so you can get birth control at a lower cost (if not free) then aren't you showing a certain intelligence? You're getting birth control, not saddling yourself down with a child you definitely can't afford! That's almost...responsible.
Go ahead...hiss and boo. But for me, it does come down to karma. When I can afford it, I'll pay for it. If I can afford to buy groceries without help, great! But if I can't get help....still have to eat. So what would you suggest I do? C'mon...tell me what I'm supposed to feed this family when there is no money.
I mailed in a request a few weeks back for Wise Bread to do a post on mortgage accelerators, and if this is in response to that I greatly appreciate it.
It seems to me however that your analysis isn't 100% right. Let's look at a situation where you make no additional principal payments and you spend every cent you make. If your bank account and mortgage are merged, the time between when you receive your paycheck and you spend your paycheck can be used to temporarily lower your principal. This results in a reduction of interest paid.
Now the $3500 fee could very well negate all the interest savings, but what if you opened a HELOC yourself? Say you normally keep $5k in your checking account. You open a HELOC and immediately transfer $5k to your mortgage along with the $5k in your checking account. Now although your interest rate on your HELOC is higher than your mortgage, you direct deposit your paychecks into your HELOC and pay your bills out of it. The HELOC then acts as your "money merge account" without you having to refinance your original mortgage. Your optimal gain is when you keep your HELOC at as close to 0 as possible.
I'm not sure what the costs are in setting up a HELOC, but you also have the benefit of an emergency fund. Rather than keep cash sitting around in case of an emergency, you use it to pay down your mortgage. Should an emergency arise, you already have the HELOC set up to cover you.
My math is a little fuzzy right now but I think it could certainly help, although not to the degree MMA claims since you're not paying off $1k extra in principal each month.
Do not prepay on your mortgage. Every available cent should be pushed into your brokerage account - INVEST! The earlier you start, the WAAAAAY better off you are.
A Dr. Who fan Flexo? As a Brit I was hooked on the good Dr. as a child. The new ones aren't so bad either. And Jess, we're happy to keep you smiling. Wisebread is a blog I enjoy writing for because it allows me to be more informal, and there's no reason for stuffiness just because I'm talking about money. Thank you both and keep on reading. We all appreciate it.
Interesting list that makes for some lively discussion about what is and isn't ethical. I can speak to item #2 as an independent professional musician who has many songs available for digital download on all the "legitimate" music sites. When you steal music for free, it's not people like Sheryl Crow who are getting hurt, it's people like me who are not signed to a record label and who depend on those sales for (a) part of our income and (b) the ability to continue to record music that can be put up for sale (which is a very expensive undertaking when you're paying for it out of your own pocket, believe me). It might seem trivial to someone who is thrilled to be getting out of paying 99 cents for a song download, but many of us are serious, educated, hard working performers who really do rely on that stream of income to help with growing our business, in addition to helping with our monthly living expenses. It's hard enough to make a sustainable living as a musician; please think twice before you steal what really won't cost (or save) you that much to begin with.
In my scenario (Julie's way), I don't take out a HELOC/ALOC -- all the money goes directly to the mortgage payoff. In the Other Way (MMA), the ALOC interest charges are discussed for a couple of months but are dismissed as insignificant and part of the Interest Cancellation account. I would be very curious to see what the line of credit balance is at the end of the mortgage payoff because yes, you can take out Loan B (ALOC) to pay off another Loan A (primary mortgage) but and you are creating additional interest charges.
As I mentioned in the post, I am not advocating the speedy payoff just comparing the two methods.
it takes a lot for me to go out of my way to comment, but i must say:
well done! lol informative and amusing :D
i tend to find my self in the question category, ironically, because i always want elaborations. how does it work? where did it come from? why do you feel that way? and on and on. ironic? because my college professors practically begged me to elaborate.
as a constant reader, i love it when you guys right things like this (or the top 5 ways to hustle a drink). it helps break it up all the frugality. sometimes it is nice to pop on and get something really entertaining. Not that wisebread isn't entertaining...you have got one of the more talented blog teams around (and i read about 20+ blogs a day.)
so to wrap things up...thank you guys for existing. I know you've taught me a lot and given me quite a few laughs. (i discovered your site through a link for the fish tank toilet)
I play various roles at various times as a commenter. But I must say the reason I clicked through from my RSS reader to this post: a Cyberman AND a Dalek.
I've talked to a policeman in England who confirms this has happened often in busy areas of London. Do you mean the set-up is fake? That may be, they can't always risk ripping people off, just in case it goes wrong.
When I lived in the UK I had a 'virgin one' mortgage through the royal bank of scotland. It was a credit card, savings and checking account all in one. I dont remember any fees. Mortgages work a little differently over there, but I basically could borrow up to my full mortgage if I needed to so it offered me a great deal of flexibility as well as saving a ton of cash.
My alma mater had a culinary school, and it turned out to be a nice way to get a fancy meal at college persons price. I would endorse the experience, although the atmosphere wasn't top knotch.
- The Happy Rock
Amazon does that periodically with the KitchenAid hand blenders, a food blog I read pointed it out once. They're generally $45-60 but every so often they'll drop it just for a day or so. If you really want one, just keep an eye on it and wait.
A change of scenery can make a huge difference. When I'm stressed out, hanging around my room or my office is the worst thing I can do. All the familiar stress triggers are there -- mountains of files, tons of unfinished projects, etc.
But when I move to a different venue, like a local coffee house or Borders, I get a lot done because I can focus on the project at hand instead of thinking about all the other things I need to do.
Yes, you are the one!! I've reviewed the video numerous times -- all the details of the HELOC payments (in and out) are not fully explored; that is, you don't really see the precise cost of the interest charges for comparison purposes.
I think they are playing games with the time value of money, presenting the LOC monthly interest as miniscule compared to the gigantic interest associated with the mortgage but if you compounded everything out (using PV and FV functions, etc.), you would see a different picture. Again, the entire 10 years or so are not shown, making it harder to dissect the program. The video viewer is dis
encouraged from taking pencil (or pen) to paper; or presumably, keyboard to spreadsheet.I guess the idea is that you are incurring a small interest charge that is calculated on a smaller balance to pay off a larger loan that is set for a 30 year time period. Once the first of the month passes, you (via your mortgage) will have to pay the entire month's interest whereas with the LOC you are just paying on the days you have a balance. But if you prepay the mortgage, you are "cancelling" the interest not because of timing but because you are lowering the loan balance.
I think you should consider the interest rate for the mortgage, the interest rate for the HELOC, and the time that you would hold the outstanding balance on the HELOC. Crunch the numbers and see what happens (or send them to me). If you are borrowing at a higher rate to pay off a lower rate, though, then it's unlikely to be beneficial.
Now, having a HELOC or LOC is not a bad idea to have in case of emergency or possibly, if you want to borrow at a lower rate to pay off a higher rate balance. (Some folks may call it robbing Peter to pay Paul or they may call it cash management).
It was Jessica (not me, Julie). Btw, I have tried culinary schools and mystery shopping. Thanks for the reminder about the culinary experience -- some coworkers and I did this when we worked close to a community college many years ago (though reservations could be hard to come by). Still I should try it again though the one that's nearest to me know is 30 miles or so away.
Also, I have tried the mystery shopping. I completed a training assignment at a retail store and everything was fine and the next assignment I was supposed to be paid for. But then I was told to go on another training assignment, this time at a bank for no compensation. Perhaps if I would have gone on that one (I pointed out to the owner that I had completed their requirements as outlined to me when I signed up), I would have actually gotten paid at some point but I didn't stick around.
<rant>Oh, man. I signed up to do that a while back. I was assigned to go to a bank and pretend that I had all kind of inheritance money that I needed to invest. I called the bank and set up an appointment, and then the lady called and had to delay because her mother was sick. Then her mom died, and she had to delay again because she was in charge of the funearl arrangements.
By the time she was ready to meet with me, I felt so bad about the entire thing (lying and wasting her time, even though I know it was her bank that set up the whole thing to test their own service) that I just couldn't go through with it.
But they never offered me a restaurant!!!
</rant>
Julie, thanks for posting this. We have a local culinary school in Seattle that offers incredible meals at great prices. The only downside is that their hours can be wacky, but it's worth making the effort to go.
I hadn't thought about mystery shopping! I'll have to add it to my list of ideas! I already have an article in the works on haircuts at beauty schools... =)
Do you mind if I ask what mystery shopping company you use?
I confess, I have been -The CHAMELEON. I am glad you are ambivalent on this one, because this one is a struggle. Great bloggers say that to get noticed you have to engage in conversation and comment on other blogs. It is hard to get noticed in the blogosphere and commenting provides an introduction. But it is important to have something meaningful to say within in the comments, otherwise they just look like spam.
Great idea on the Culinary school, I used to go to a hair dresser's school to get super cheap hair cuts.
Also, you all should highlight mystery shopping. I have done it for 10 years and my family and I eat out will little to cost for us. It is fun, it is easy (except at the beginning - there is a lot of work on the front end to fill out forms and applications) and a family can eat out with out busting the budget.
Until then, I'm putting this comment firmly in the NAYSAYER category
If you click on Jess's hyperlink that takes you to her beauty blog, you will see that you have neglected to include her particular commentor category in your post; the Incredibly Beautiful Woman with Good Blog of Her Own and Nice Things to Say About Us category.
Make sure to update the post accordingly.
I have been in the position that to receive help from Human Services, I have had to lie like crazy! Is it wrong? To some of you, it might be. But when it comes to my kids...I'll do whatever it takes to make sure they have food. The system is totally screwed up. Even the case workers will tell you that you have to lie to get help! I've been honest about my situation before... and either I get denied help or I get the "help" of $4.00 a month food stamps. Explain to me what $4.00 a month is going to do for 3 hungry kids???
Planned parenthood...if you lie to them so you can get birth control at a lower cost (if not free) then aren't you showing a certain intelligence? You're getting birth control, not saddling yourself down with a child you definitely can't afford! That's almost...responsible.
Go ahead...hiss and boo. But for me, it does come down to karma. When I can afford it, I'll pay for it. If I can afford to buy groceries without help, great! But if I can't get help....still have to eat. So what would you suggest I do? C'mon...tell me what I'm supposed to feed this family when there is no money.
I'm not saying you should prepay just wanted to show how the "program" being proposed by UFirst works.
I mailed in a request a few weeks back for Wise Bread to do a post on mortgage accelerators, and if this is in response to that I greatly appreciate it.
It seems to me however that your analysis isn't 100% right. Let's look at a situation where you make no additional principal payments and you spend every cent you make. If your bank account and mortgage are merged, the time between when you receive your paycheck and you spend your paycheck can be used to temporarily lower your principal. This results in a reduction of interest paid.
Now the $3500 fee could very well negate all the interest savings, but what if you opened a HELOC yourself? Say you normally keep $5k in your checking account. You open a HELOC and immediately transfer $5k to your mortgage along with the $5k in your checking account. Now although your interest rate on your HELOC is higher than your mortgage, you direct deposit your paychecks into your HELOC and pay your bills out of it. The HELOC then acts as your "money merge account" without you having to refinance your original mortgage. Your optimal gain is when you keep your HELOC at as close to 0 as possible.
I'm not sure what the costs are in setting up a HELOC, but you also have the benefit of an emergency fund. Rather than keep cash sitting around in case of an emergency, you use it to pay down your mortgage. Should an emergency arise, you already have the HELOC set up to cover you.
My math is a little fuzzy right now but I think it could certainly help, although not to the degree MMA claims since you're not paying off $1k extra in principal each month.
Do not prepay on your mortgage. Every available cent should be pushed into your brokerage account - INVEST! The earlier you start, the WAAAAAY better off you are.
"I dig Trent in a totally kosher kind of way."
Love, Wilbur, the Wise Bread pig.
I would make the effort, but I never spend enough for it to matter. We pay off credit cards every month as a matter of course.
Annie, remember that there are three credit reporting agencies and you should check all three for negative info.
A Dr. Who fan Flexo? As a Brit I was hooked on the good Dr. as a child. The new ones aren't so bad either. And Jess, we're happy to keep you smiling. Wisebread is a blog I enjoy writing for because it allows me to be more informal, and there's no reason for stuffiness just because I'm talking about money. Thank you both and keep on reading. We all appreciate it.
Interesting list that makes for some lively discussion about what is and isn't ethical. I can speak to item #2 as an independent professional musician who has many songs available for digital download on all the "legitimate" music sites. When you steal music for free, it's not people like Sheryl Crow who are getting hurt, it's people like me who are not signed to a record label and who depend on those sales for (a) part of our income and (b) the ability to continue to record music that can be put up for sale (which is a very expensive undertaking when you're paying for it out of your own pocket, believe me). It might seem trivial to someone who is thrilled to be getting out of paying 99 cents for a song download, but many of us are serious, educated, hard working performers who really do rely on that stream of income to help with growing our business, in addition to helping with our monthly living expenses. It's hard enough to make a sustainable living as a musician; please think twice before you steal what really won't cost (or save) you that much to begin with.
In my scenario (Julie's way), I don't take out a HELOC/ALOC -- all the money goes directly to the mortgage payoff. In the Other Way (MMA), the ALOC interest charges are discussed for a couple of months but are dismissed as insignificant and part of the Interest Cancellation account. I would be very curious to see what the line of credit balance is at the end of the mortgage payoff because yes, you can take out Loan B (ALOC) to pay off another Loan A (primary mortgage)
butand you are creating additional interest charges.As I mentioned in the post, I am not advocating the speedy payoff just comparing the two methods.
it takes a lot for me to go out of my way to comment, but i must say:
well done! lol informative and amusing :D
i tend to find my self in the question category, ironically, because i always want elaborations. how does it work? where did it come from? why do you feel that way? and on and on. ironic? because my college professors practically begged me to elaborate.
as a constant reader, i love it when you guys right things like this (or the top 5 ways to hustle a drink). it helps break it up all the frugality. sometimes it is nice to pop on and get something really entertaining. Not that wisebread isn't entertaining...you have got one of the more talented blog teams around (and i read about 20+ blogs a day.)
so to wrap things up...thank you guys for existing. I know you've taught me a lot and given me quite a few laughs. (i discovered your site through a link for the fish tank toilet)
I play various roles at various times as a commenter. But I must say the reason I clicked through from my RSS reader to this post: a Cyberman AND a Dalek.
Thanks a lot for linking me :) You're a star!
I've talked to a policeman in England who confirms this has happened often in busy areas of London. Do you mean the set-up is fake? That may be, they can't always risk ripping people off, just in case it goes wrong.