Reader Mailbag: Qatar World Cup

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What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Saving for education
2. Consolidating private student loans
3. Gift exchange ideas
4. Buying a minivan
5. Credit report questions
6. Splitting mortgage payments
7. Walking away
8. Finding a credit union
9. Leaving an underwater condo
10. Tax breaks for window coverings?

I was extremely disappointed that the 2022 World Cup was given to Qatar instead of the United States.

For many years in college and afterwards, I worked with a group of people from all over the world – some from Europe, some from Africa, some from Asia. The one thing that they all had in common was a passion for soccer, and that passion was infectious. Before long, I found myself watching the World Cup and paying attention to several different international leagues.

During the World Cup this past year, my son got into watching it. He has been playing soccer recently and enjoyed watching the games and rooting for the United States.

I was deeply hoping that the 2022 World Cup would come to the United States so that I could attend some of the games with him and the rest of our family.

Alas. Perhaps it will come another year.

Q1: Saving for education
Currently I am 26, my husband is 27. We both work but he is in the construction industry so is laid off usually every winter. He does a paper route and collects unemployment, so he still brings in about $35,000 a year, often more. I make $30,000 a year, plus I have a weekend job (tipped) where I bring in maybe $500 a month. I have ten percent going in a Roth, by husband has 6 percent going into a Simple IRA. His retirement balance is about $6,000 while mine is $12,000. Because I am somewhat unimpressed with our retirement account provider through my work, I have a seperate Roth with Vanguard that is holding steady at $7,000. We have $130,000 yet to pay on our mortgage. We have no children but would like to start trying in a year or two. My question is this: I have $12,000 in a savings account (ING) that I’m saving for tuition. I am in a Master’s program for Public Relations – it is a two year program that will cost me about $50,000 when all is said and done. I’ve already paid the first semester ($7,000). I’ve received one $3,000 scholarship but my work is not contributing at all. I believe my job prospects will improve vastly when I have my masters, however I have never taken out a student loan and don’t want to. It may be a possibility to borrow money from my mom to pay tuition. Should I knock down our retirement contributions so I can pay for tuition as it comes, or just keep saving and hope we can scrimp enough to pay tuition each semester? I hate to stop contribution to retirement at the pace I’m at – I am so proud of our retirement savings. I am fine paying our minimum mortgage as we started at $150,000 just five years ago and have paid an extra thousand or more each year up until now.

- Jill

It seems as though you have a clear goal and your only real concern is whether or not you should redirect your retirement savings into additional savings for this goal.

The first thing I would suggest is to figure out whether you’re on par with regards to your retirement savings at this point. I would use a retirement planner and make sure that you’re at least somewhere in the ballpark of where you need to be for retirement.

If you’re doing well for retirement, I would cut back on the retirement savings and redirect the money into educational savings. If you’re not doing well, I would take the slow route, maintaining your retirement and looking for other ways (more earnings, perhaps?) to bolster your education savings. Either that, or bite the bullet and use an educational loan.

You may also want to consider a 529 savings plan for your college savings. If you use the earnings in that account for educational purposes, you don’t have to pay taxes on the accrued interest.

Q2: Consolidating private student loans
I currently owe approximately $120,000 in private student loans from college and graduate school. I am looking to consolidate them to get control of the monthly payments (right now, it’s around $1500 a month). I also two small government loans, but I do not want to consolidate them with these. The only information I’ve found is Chase and Wells Fargo are possibilities, but I will never go with them, they’ve been a nightmare to work within the past. I’m considering a loan from my credit union, but my credit score is not good. I do not own a house and I am single. I make a little over $50,000 a year between my main job and a part-time job. Are there any other options out there to consolidate other than Wells Fargo and Chase, and are they safe? Or does the credit union have a potential option?

- Pam

I’m afraid that if you have a poor credit score, you haven’t got a very good chance of reducing your interest rates lowered via a private student loan consolidation.

When you’re consolidating a set of private student loans, you’re essentially just trading one student loan for another one. You’ll go through many of the same evaluations as a person would when applying for a normal student loan and will get an offer that reflects upon your current credit standing and your income.

My suggestion to you would be to focus on repairing your credit above all else. If you are earning $50,000 a year, your monthly student loan payments are manageable if you keep your personal life under control and live lean. Keep current on all of your debts for a while.

When you do consider consolidating, I would look to the banks that you’re already borrowing from (and thus have established a solid payment history with) and inquire with them about a consolidation. If you wish to seek other banks, Chase and Wells Fargo are certainly options, as is your local credit union.

Much of this hinges on having a solid credit rating, however. If your rating is poor, you’re not going to get the best rates on a loan consolidation.

Q3: Gift exchange ideas
My extended family is getting together the week after Christmas. We always do a gift exchange, but every year it seems like everyone gets something they don’t want. We don’t want to abandon the gift exchange, but we don’t want to just tell each other what we want, either. Do you have any ideas?

- Carrie

My suggestion is that you shouldn’t worry so much about the gift, but instead focus on the exchange. How can you make the exchange itself more fun?

One way to do that is to put some huge restrictions on the gift. This year, everyone in the exchange is giving their favorite movie as a gift. Next year, everyone is giving their favorite book as a gift. What this does is it encourages both givers and recipients to talk about the things they’re passionate about with people they care about.

Another way to do that is to make the exchange into a bit of a game. Try a “yankee swap,” for example. A “yankee swap” happens when everyone opens their gifts in a certain order (usually going around the room). When you open your item, you show it to everyone, then you can “swap” your newly-opened item for an item someone else has already opened. The first person to open doesn’t get to swap when they open, of course, but they instead get the chance to be the last person to swap, choosing from among everything.

Liven it up and make it fun. Remember that it’s about the exchange, not about the gift. It’s about the time spent with loved ones and the shared experience.

Q4: Buying a minivan
I have a 2001 Lincoln Town Car with 150k+ miles on it. I love it, it’s paid for and I budget for its expense throughout the year fairly comfortably.

My wife and I own three dogs and we travel around the country to basset hound rescue events. (I write a mystery series that features a basset hound and I give the proceeds of the book sales to the rescues.

I’m interested in buying minivan for the dogs to travel in on long trips and to be able to hold boxes of books, luggage etc. I’ve even bought some books on how to convert a minivan into a makeshift RV.

I plan on keeping my Lincoln and using the minivan on other than long trips to prolong its life. I know you did lots of research before purchasing your car. I want a functional and comfortable used minivan and want to know your suggestions for thing s like how much mileage, year, model etc that you might recommend considering the way I intend to use it….that is, hauling dogs, long trips and some around town use.
- Tom

Given that you’re going to be driving on long trips with a number of animals on board, my reaction would be that your utmost priority with a minivan purchase would be reliability.

Typically, if you’re looking at a late model used (covering model years from roughly 2004 to 2008), the Honda Odyssey and Toyota Sienna are on top of the pile with regards to reliability, so I would steer you in their direction.

We looked at several Odysseys and Siennas before settling on a great deal on a Honda Pilot (a SUV).

Q5: Credit report questions
I just got a copy of me and my husband’s (of 2 years now) annual free credit reports and have a couple questions for you. I had excellent 25 years of credit and was able to buy a house a little above my means a year before we were married (2007). Despite the slight loss in value, we are managing the payment just fine. Now, with all the credit regulation changes, my credit card limits have all been reduced and my debt/credit ratio is 93% because of my mortgage. My husband’s credit was not that great because he had some late payments on some bills. When we got married, in 2008, we paid off his bills and canceled most of his credit accounts and are using mine as one joint account and several authorized user accounts. We pay them off every month except the mortgage. Now, with our one joint account, his debt/credit ratio is 7%.

My question is, in about 5 years, we want to sell this house and buy farm type property to retire. I don’t think we will have much of a problem but want to ensure we have good enough credit to get a good deal. To improve my husband’s debt/credit ratio further, should we make all our accounts joint rather than authorized user?

How can I reduce my debt/credit ratio other than continuing to pay down the mortgage that is all in my name? Does it really matter, based on our goals to eventually sell the house and purchase something else of equitable value? Between this house and another rental house, I have about $300,000 equity.

Also, the end of the credit report lists about 8 credit report requests that may harm our credit and another list that will not harm credit. I do not recognize any of the names on the list that may harm our credit and we only applied for one, Sears, credit card this year. Do you know why we would have so many names on the list of credit report request that may harm our credit and how we would correct it and prevent these requests in the future? We have already opted out of the permission to allow promotional requests for our credit report.
- Laura

Your best bet for improving your debt-to-credit ratio, short of applying for more cards (which has its own set of problems), is to simply focus on lowering that mortgage. Not only will it improve your credit, it’s also one of the better places to put your money in terms of a secure return right now.

Your husband’s ratio is fine – I wouldn’t worry about a 7% ratio one bit.

As for the credit requests, most of them only have a very short and small negative impact on your score. If you’re seriously worried about them, I would spend some time tracking down where exactly the requests came from. Usually, you’ll find that in some way, you initiated the “hard pulls” (the ones that can have a negative impact).

Q6: Splitting mortgage payments
My current house payment (with escrow for insurance, tax, and FHA insurance) is just over $1000/mo with an actual rate of 5.25%. The loan portion of the payment is around $700. I have been paying $1200/mo to pay down additional principle because I calculated that the small amount each month will shorten the life of the loan significantly. I am wondering if splitting my payment over the 1st and 15th of the month would speed up the payment significantly? My additional payments total to around $2200/year, which is nearly 3 additional payments on the loan. Is there an easy way to calculate the difference that bi-weekly payments would make?

- Alex

The amount you would save by splitting your payment is roughly what you would earn on $600 at 5.25% interest over 15 days. This adds up to $1.31 per payment – in other words, not too much to worry about.

Over a long period, that extra $1.31 will add up, but it will at most add up to a partial single payment at the end of your loan.

My suggestion to you is that if you can automate all of this, go ahead and do it. It will amount to a small bit of savings along the way, particularly if that early payment causes no cash flow issues for you right now.

Q7: Walking away
I am 53 years old. I was married for 34 years and have two grown children, both gainfully employed with retirement plans in place and health insurance coverage. For the most part, my work is done. Just as my husband i were looking toward the future, he was diagnosed with terminal cancer on January 1, 2009 and died in March of this year. Prior to his death, he worked for the same company for 31+ years with good benefits. I work, but it was more to keep me busy than a need for the income. Prior to his death, Jerry and I managed to get out of debt with the exception of our house and start saving. Fast forward 8 months later. When Jerry died, I believed I had life insurance benefits and did not worry overly much. Most of our “emergency” funds were used up during his illness. I took FMLA leave the last four months of his life and took care of him full time. While he had life insurance benefits through his job, I didn’t realize until he was on disability that once you’re on disability, those benefits are substantially reduced. Also, while you’re on disability because of a terminal illness, it’s impossible to get life insurance. It’s like chasing your tail.

Now the situation has changed. Upon his passing, I learned that I have a huge mortgage payment and very little insurance to cover it. I make about $50,000.00 per year. I have collectively $110,000.00 in a 401(k); I have $70,000.00 in savings and except for the house, no debt. I have two cars, both free and clear. That’s it. In a perfect world, I make enough to pay my expenses and to save something every month and enjoy my life; however, the mortgage payment of $1,300.00 on the first and $300.00 on the second is killing me. I have to take money out of savings every month to make ends meet. While the house is (was) in both our names, the mortgage was in his name only. I have not told the mortgage company about Jerry’s passing, I simply make the payments every month and they leave me alone. I could and will put the house on the market, but I owe approximately $170,000.00 on the house and cannot hope to cover that in this market, but I will try. With winter fast approaching in northeast Ohio, it is not the optimal time to list your house. Not only do I need to sell the house because I cannot afford it, but it’s a large, 5-bedroom, 4 bathroom house and I’m the only occupant. The energy bills alone are monumental. Also, my commute is approximately one hour each way to work. I need to live closer to my work and in a smaller house.

Here’s my question and it’s twofold. I would like to stay in the house over the winter because now is not the time to list it. I would like to put the house on the market in the spring when everything looks better. If, after a reasonable period of time, I cannot sell the house, I would like to call the bank and tell them they can have it. How badly will this hurt my credit? I never worried about it before because everything was in his name but now that I’m on my own, my credit score is (obviously) more important to me. Secondly, if I do manage to sell the house, it will be, I’m sure, at a shortfall. Will I be responsible for any leftover debt? I feel like I’ve been merely existing these last 8 months but I’m ready to at least start looking ahead so any information you can provide me would be sincerely appreciated. While I do not want to “beat” anybody out of money, I’m not so naive as to believe that a lending company will care overly much about my future. If, after reading this, you have other ideas that I haven’t thought about, by all means, please tell me. Any advice you can give me is appreciated. Thank you.
- Jo

Essentially, you’re asking what kind of impact walking away from your home and your mortgage will have on your credit. It will have a very serious negative impact on your credit, as the mortgage will be marked as being in default.

What does that mean? Negative items on your credit report have the greatest impact right when they appear, and that impact slowly shrinks over time, eventually disappearing after seven years (for most things). In your case, your credit will be completely shot for a year or two and will slowly begin to recover after that.

My suggestion is that you have a conversation with your lender before considering this move. Obviously, they are not going to want you to walk away from this, either – they don’t really want the deed to your home. Many banks are working with the people who own these homes to come up with better lending arrangements for both parties.

Q8: Finding a credit union
I’m looking to refinance my condo. Unfortunately, I own two companies and my W2 situation is a mess because one was started less than 2 years ago. That means despite having a 800+ credit score and over $100k in savings, my local banks computers just bounces back my application. I was told to try a credit union that doesn’t do automatic processing and I would probably have better luck. My question is how do I pick / research a credit union? There’s a lot in my state ( Illinois ) and city ( Chicago ). While there are a few reviews on yelp, they are few and far between.

Is there any place that rates / reviews credit unions?
- Griffin

There is no central clearinghouse for credit union reviews that I’m aware of. As you mentioned, yelp has some reviews, as do other services like Angie’s List.

My suggestion is that you simply ask around your social network. Ask your business associates what credit unions they use and recommend. What shops do good work and which ones have a bad reputation?

I tend not to trust online review aggregations from anonymous people because so often there are employees and owners putting up bogus positive reviews and competitors putting up bogus negative reviews.

Q9: Leaving an underwater condo
My wife and I each have identical condos, same lay out, same neighborhood. She bought hers for $200K, and I bought mine for $250K each with a 5/1 ARM loan. Her ARM came to term last year and is paying 3 points on top of the LIBOR index (luckily the LIBOR is very very low for now). My ARM comes to term next August with the same terms, 3 points on top of the LIBOR index. Refinancing is tough right now because we are underwater on both condos. But we are making our payments on time with no problems and don’t neccesarily have hardship. We don’t fall for any government funded help through Freddie Mac or Fannie Mae, so it seems we are out of luck there. We are currently renting her condo and living on mine. Our ultimate goal is to buy a single family, or townhome. My question is how should we go about this? Short sale both condos? Pay off her condo as much as possible to build equity, then sell it, or just continue to rent it and try to pay off the smaller loan then refinance? Short sale my condo, and live in hers? or Vice Versa? Try to talk with our lenders to get a better rate? The condos are small and not practical for two people but we are adjusting? Or do we just have to wait it out a couple of years? How many paths are there to this problem?

- Henry

If you have a good payment history, the first thing I suggest that you do is talk to your lender. Discuss the options with them and let them know that a short sale is something that you are considering. See what kind of packages they can come up with for you.

You can also take the same story to other banks who may be interested in picking you up as a customer, though they won’t have as much incentive as your current lenders.

I think most of this comes down to how underwater you are on these loans and whether or not your bank actually will refinance them in some sensible way. I can’t predict that – you’ll have to find out for yourself.

Q10: Tax breaks for window coverings?
I have looked high and low, both online and in stores, for information on the tax credit for energy efficient window coverings. I keep coming up with the same thing – “consult your tax professional to verify you qualify for the savings.” Well, guess what. I am the tax professional in this family – I do our taxes on TurboTax every year (splitting the cost of the software with family members.) Anyway, what information can the tax professional can read and understand that I can’t? Do you know the details of this credit? Thanks in advance for considering this question.

- Janelle

What’s actually happening here is that window covering manufacturers and salesmen are using some ambiguities in the tax code to promote something that isn’t really there.

Yes, there are a lot of tax breaks for energy efficient home improvements right now, as you can see here. The catch is that such tax breaks only apply for items that are “specifically and primarily designed to reduce heat loss or gain,” according to the IRS.

The problem is that the burden is on the homeowner to prove this, not on the manufacturer. The manufacturer can claim all they want that there are tax credits available for window coverings, but they only apply if the window coverings are highly efficient and are made primarily to reduce heat, like a rectangle that blocks all light and heat coming through the window.

Get window coverings that look good and are maybe a little efficient. Don’t waste your time trying to chase tax benefits through a vaguely written law unless you want to spend time proving to the IRS that your new window coverings actually provide a .30 solar heat gain coefficient in your home. If you want to save tax dollars with your windows, improve the windows themselves.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag. However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

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39 thoughts on “Reader Mailbag: Qatar World Cup

  1. Q4 – Minivan. I’m in a similar situation – large dog (100+ lbs) a baby on the way and a sedan (not to mention a 6’2″ husband). As much as I hate to I’ve gotta get something bigger. I haven’t done nearly as much research as you have, but one thing I have noticed is that whether you are looking at minivans or SUVs (trucks, too) there isn’t much price difference between new and slightly used. I’ve read the reasons for this online, can’t remember what they are right now, but it is supply and demand and not likely to change for a while.

    The Odyssey and Sienna hold their value quite well (this isn’t a good thing if you want to buy a used one.) But several of my friends and relatives have these models (various years) and they’ve lasted a long time (150k+ miles). However you can spend less money and get more minivan in another model – may not be a bad idea. A friend of mine bought a Caravan for $4k less than a comparable Odyssey. Her rationale was “$4k will pay for a lot of repairs”. That’s not a bad point at all, IMO.

    I’ve come to the conclusion I probably won’t be keeping my sedan (as much as I’d like) and I’ll probably buy new. You might come to a different conclusion for your needs, but I thought I’d share the observations I’ve noticed in the early stages of my research.

  2. Regarding Q7: Walking Away: I believe there may be a way to walk away without an impact to your credit. I found myself in a similar situation last year when my young husband passed away suddenly. There was almost no life insurance because we simply weren’t prepared. The house was in both our names, but the mortgage was only in his name. I work part-time as a bank teller; the mortgage was twice my monthly take-home. There was no way to keep the house. I had to walk away. Because the mortgage was in his name, in the state of Michigan, I was not responsible for that debt and was able to walk away without a hit to my credit. It was an emotionally devastating decision, and I still feel guilty – but I had no other options.

  3. Re Q7 – First, I want to say how very sorry I am on the loss of your husband. Please contact an attorney and figure out what your options are before doing anything. I don’t think your situation is as devastating as it may appear to you right now. With the mortgage in his name only, this might not be too bad of a situation, although the lender might seek some sort of payment from his estate (you). If you approach it right (with a lawyer’s good advice), you might avoid having to do anything that affects your credit. Selling the house and moving to a smaller home closer to work is really what you need to do. See if that can happen, even if you have to list it over the winter. While that’s not the “prettiest” time for marketing a home, they can still be sold. Contact a good realtor and their thoughts on the current market. I just think you are making too many assuptions without really exploring the facts.

  4. Q7: Have you considered putting your house up for rent before you walk away from it completely? Between finding cheaper, smaller, more convenient housing for yourself and renting out your larger home, you may be able to weather the slump in housing prices and get a better deal when the market picks up. So sorry for your loss.

  5. Re: Q7

    Am I the only one who noticed Jo said the mortgage was in her husband’s name only?

    Defaulting on the mortgage would not affect her credit AT ALL. Did Trent completely miss that part?

    Heck, her husband may have even had the foresight to purchase life insurance on the loan, in which case she’s been making the payments unnecessarily. It’s at least worth looking into.

    Otherwise, the bank will foreclose on the home, which would wreck her (deceased) husband’s credit, but wouldn’t affect Jo’s at all. However, the bank would likely seek payment from her husband’s estate, including any retirement accounts that Jo owned jointly with her husband. The life insurance money, on the other hand, would not be vulnerable, since as the beneficiary, it belongs to Jo, and not her husband’s estate.

    I think Trent really missed the mark on this one. There are certainly a number of complicated legal issues in play here, but Jo’s credit is definitely not one of them, yet Trent spent his entire answer focusing on an element that is completely irrelevant to the situation.

  6. Q3 – Trent’s idea of themed gift swaps is a fun idea. If you don’t go with that, in similar situations where I may not have a good idea of a more personal gift, I default to giving nice Christmas decorations or ornament(s). At some “Yankee” swaps, each gift can be traded up to 3 times, & when someone takes your gift, you then can trade, then that person can trade etc.

  7. Regarding Q6. I think the answer is incorrect. In the United States, all payments are applied as though you paid them on the first of the month, so splitting payments won’t save anything. The only time the date of the payment matters is when paying off the loan. At least that is my understanding. I guess it would save you money because the money hasn’t left your hands yet, so you would make a bit of interest on that, but that wouldn’t be much with the low interest rates savings accounts pay right now.

  8. I agree with Katie. Why not go to Qatar? What an amazing opportunity to see a place that you otherwise probably would never visit. If you’re not comfortable going to that part of the world, there’s always Brasil and Russia. It’s not like it’d be a super cheap trip even if it were in the States once you factor in travel, lodging and tickets…

  9. Regarding Q1. I have PR degree from a top-ranked program, and was told by numerous professors and at career seminars that a master’s in PR won’t substantially increase your earning power or your job prospects. Internships and experience in the field is what will do that for PR. Experience is key.

    That being said — I graduated over 6 years ago and I don’t currently hold a PR job. The economy is much different now than when I graduated. It’s very possible things have changed, but figured I would mention this as something to think about or research before investing a large amount of money in a master’s program.

  10. I really like Trent’s Q3 answer. My family used to exchange gifts. My list was over 30 people. It became to much. It wasn’t easy doing away with the exchange. It took about 4 years before everyone felt good about it. Everyone I talk to thinks it is great now. No pressure. We just get together and visit, eat and play games. There is no worry about the money.

  11. Regarding Q7 once more, for emphasis, and with a gloss or two: If Jo’s name is not on the mortgage or any related promissory note, then, unless Jo signed a guarantee of payment (unlikely), Jo is not responsible for payment of this debt. The financial institution that owns the mortgage will continue accepting payments, however, as long as Jo makes them. Jo should consult an Ohio real estate lawyer to discuss whether and how long she should continue making payments.

  12. I wish I was old enough to appreciate the Olympics and World Cup coming to the U.S. when I was younger. I just wish sometime in my lifetime, both of these events will come again. Or at the very least, some where a little more travel friendly than Qatar.

  13. I am with Adam on Q6. I don’t know if it’s all mortgages in the US, but for my mortgage, it makes no difference if I pay if full at the end of the month or if I pay half two weeks ahead of time. My student loans, however, were different, and for those it would reduce my interest to make a half payment early. I would check your mortgage documents or call the bank if you’re not sure to see how the interest is calculated and if it would make a difference before bothering to set up a complicated half payment schedule.

  14. Regarding Q7 – I don’t understand the statement that “While he had life insurance benefits through his job, I didn’t realize until he was on disability that once you’re on disability, those benefits are substantially reduced” at all. Life insurance and disability are two separate policies. If the life insurance premiums were continually paid, the fact that he was on disability prior to his death should not have affected the policy.

  15. Q3: Seems like I read recently about a family gift exchange where the adults each brought a toy that had been one of their childhood favorites (a new store-bought item, not the original). They had fun yankee-swapping the toys around, and then all the toys were donated to Toys for Tots. Sounds like a good time to me.

  16. Jo, check out the making home affordable programs. At first glance, it sounds like you’re likely to qualify for their modification program.

  17. Janelle, check out the websites for your local utilities. They will have information about their programs and probably links to federal credits as well. Many utilities will also have efficiency counselors or other dedicated personnel to help you evaluate if things are effective and necessary and help you through the rebate or credit process.

  18. I feel that exact same way about the World Cup, my 4-year old and 3-year old would be at a perfect age to go in 2022, but might be a bit young to travel to Qatar. Maybe next time.

  19. Also, Janelle, ignore trent and don’t replace your windows unless there are absolutely terrible. The ROI on incremental window upgrades is usually decades.

  20. Y’all, Qatar is not Somalia. I mean, 12 years is a long time from now and nobody can tell you what the security situation will be there (or in England or in Canada or here) then, but really, at the present time it is not dangerous or difficult as a destination.

  21. Q6 – Paying your mortgage bi-weekly will save you exactly $0.00. The savings from bi-weekly payments comes solely from paying an extra half payment every six months. There is no savings whatsover due to making half the payment 15 days early. First mortgages do not accrue interest daily in this country, except at origination and at payoff. At all other times, interest is calculated monthly based on the outstanding balance on the first of the previous month. This is federal law and does not vary by lender or contract.

    If you have room in your budget to pay yet another extra mortgage payment, then increase the amount you are already paying each month. It will accomplish the same thing a bi-monthly mortgage will accomplish, with no fee to set-up or service. Best of luck to you with your early payoff plans.

  22. We also abandoned the gift exchange, and play a game instead. I am the one that has to plan and execute the game, (because I was the one who was adamant about ending the exchange, so feel obligated to provide a fun alternative) but it always turns out to be a great time with the fam.

  23. Q7 – So sorry for your loss. I think it would be in your best interest to consult an attorney. The significant issues are: the mortgage is not in your name, there is a first and a second mortgage, whether or not you are in a recourse state.

  24. @2. I have a Honda pilot 77000 mi. Friend has American brand with 75000. Hers prob $4000 cheaper at start but she’s paid far greater in repairs than $4000. Me? $0! Honda makes good cars. I pay maintenance but not one repair has been necessary.

    @17. Life ins policies are different. Some are accidental death policies. Usually the kind provided through work. Only pays full amount if there’s been an accident. Not for death due to disease.

  25. @ Amanda (I think you were responding to me) – I guess that’s possible, but the fact that he was on disability still shouldn’t have affected it. That’s the whole point of buying life insurance (or accidental death insurance) while you’re still healthy.

  26. @ Amanda – I wouldn’t say AD&D (accidental death and dismemberment) policies are “usually” the one’s provided by work. I suppose they CAN be provided by an employer, but I’ve never seen it. Both my husband’s and my life insurance through work is standard life insurance.

    Typically, AD&D is super cheap, and the only time I’ve been offered it was through credit card companies and other such odd places to obtain insurance.

  27. @ Des – Ours too. And so was my dad’s, and he was a) on disability during treatment for cancer, b) resigned his position about 6 weeks before his death, and c) still had a full payment of insurance benefits. It sounds like either Q7 is confused about what type of policy her husband had, or something fishy is going on with the insurance company.

  28. If a debt is one person’s name, how can it effect the credit of another person? They do not legally have that debt! This answer seemed totally wrong.

    Step 1- see an attorney. before ou make another single payment. Even if she decides to walk away, the mortgage has to be behind for 3 full months before foreclosure proceedings, and they take a few months too. I wold just stop paying right now, and then she won;t get a foreclosure notice till March anyway!

    If the money comes out of the estate-that may be the problem. If all her savings is also in her husband;s name- that may be on the line. If the insurance is meager- could be an issue.

    Anyway- Step one- talk to LAWER.
    Step 2- talk to Bank.

    Bad advice to see the bank first. George Bailey doesn’t work there anymore.

    Lawyer FIRST! The bank does not have her interests in mind, and will not recommend a course of action that she perhaps has not thought of, that costs the bank extra money, even if it is in her best interest. They will only answer questions, and guide her toward a solution that benefits the bank.

  29. I’ve been to Qatar it is very safe and like a middle east lite, but still different enough to make a memory your kids will never forget!

  30. I would recommend to the lady in Q7 to 1) see an estate attorney and 2) think about renting a room out to a carefully screened tenant. Also, though the loan for the house was in the husband’s name, how was it titled? Was there a provision or insurance included in the loan that would pay off the mortgage in the event of her husband’s death?

  31. Q7 – Perhaps taking in another female room-mate or two while she sorts out the issues would lessen the financial burden.

  32. Jo, talk to a real estate attorney before you do anything. If your name is not on the mortgage, then you personally are not liable for the debt, but your husband’s estate is. Which, in the end, may not make much difference, but it would be worth discussing with an attorney to see what your options are. Trent seemed to overlook the fact that you are not on the mortgage. Good luck.

  33. Q#7 Real estate lawyer immediately. Reread all the comments especially #30, #32 and #34. Good Luck and very sorry about your husband.

  34. Q3… i just heard on the radio a family who stopped exchanging purchased gifts for each other and started making videos for a particular family. Sue’s family makes one for sister Jane’s family all decdided by drawing names. Then everyone gets to watch them. I think they even decided on general topics. Like create a video that shows your family making supper together and ordinary things that become a historical record for the whole family. I’m sure I’m missing some key points to the idea and you could also write a story or poem or something like that; again for everyone to share.

  35. Re: Q7: Are you *sure* you couldn’t sell the house at a break even point or better? $1600/mo in mortgage payments for a ~$170,000 remaining on a house near that value seems really high. Unless I missed it, you didn’t say how much the house is worth, my house is worth twice that and my mortgage payment is about $1600/mo. A “large, 5-bedroom, 4 bathroom house” in Northeast Ohio seems like it could go for more than that…? Or, worst case, if you can’t sell it, perhaps you could refi it to at least get the payments down; my rudimentary calculator puts payments on 170k for 30 years at about 900 – a huge drop from your 1600 you’re paying now, which might be more sustainable until you can sell it. Perhaps then renting it out might be a more cash-flow positive approach, too.

    Best of luck to you.

  36. Re:Q7 There are several excellent responses here. I’d like to make one more suggestion: If you really want to stay in your home while you recover from your heartbreaking loss, consider getting a roommate right now. Explain to them that you might put the house on the market in the future, but that you will give them plenty of notice. Vet potential roommates very carefully. Talk to them, check their credit and listen to your gut. A good roommate will help tide you over while you work through the other financial and legal issues.

    In the meantime, get on the Frugality Bandwagon. 19.6k in mortgage payments on a 50k salary is completely do-able unless there are staggering credit card debts, which you thankfully don’t have. The first thing I’d do is check your withholdings. If you routinely get a large tax return, you might be able to adjust your withholdings to give you more money to help make the mortgage payments, especially if you are still deducting large amounts of interest expense on your mortgage. Check with your CPA and get a good one immediately if you don’t have one now.
    If you really do want to stay put once you’ve sorted out your legal issues, refinancing might be another possibility. If you’re not too far underwater, you might be able to get a lower interest rate and reduce your monthly payments by bringing a small amount of cash to closing.

    You sound solid and stable. I think you have the tools to make good decisions to protect your financial future. I hope things turn out well. Please consider keeping us updated, as we are rooting for you and your recovery.

  37. If it’s not about the gifts, then why bring the junk gifts in the first place? Skip the swap and just spend some time together. It will save everyone from spending the money and receiving the stuff they don’t need.

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