Minivans a good family-car buy?
Minivans aren't cheap, but they may be worth it for your family (Question #4). Also in today's Reader's Mailbag: saving for school (#1), splitting mortgage payments (#6), and finding a credit union (#8).
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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.Skip to next paragraph
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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.
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?