Interest rates on student loans: when things get fishy
Interest rates can change when consolidating private and subsidized loans. Be sure to have the consolidation and the interest rates documented. See question No.3 of the Reader Mailbag.
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What number would that be? If your car loan is 6% or over, I’d pay off the car loan. Otherwise, I’d hold onto the car loan, make minimum payments, and then make a full down payment on the house loan.Skip to next paragraph
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What you’re trying to do is minimize your interest over the course of both loans.
It depends on why you’re homeschooling. In short, your educational goal should always be to expand the horizons of your children.
If you’re homeschooling because you believe the education provided in your public school is too limiting and you believe you can provide more well-rounded education to your child, it’s a good idea. If you’re homeschooling because the school district isn’t teaching exactly what you believe and you want to shield your child from those ideas, then it’s not a good idea.
The best gift any parent can give their child is the ability to process information sensibly on their own and deal with a variety of life situations and issues using those skills. If this is absolutely your goal for homeschooling and you have real reason to believe you can provide it while other school situations cannot, then it’s a good idea. If your goal for homeschooling is to reinforce in your children the values you hold dear and to undermine other values that you do not hold dear, homeschooling will have some awkward results.
Q8: Overwhelmed by mortgage
My husband and I bought our current home in 2003 at the height of the housing market in our area with the intent of renting it out as an investment. Through a series of events we are now living in this small home and are upside down in our mortgage by about $80,000. We have learned some hard lessons along this path, and our family continues to grow. To put it simply we need more space and I see no way out of our current home. Are there any options for homeowners like us other than renting out our current home and moving to another home? Is there anything I could be missing here?
My husband is a teacher and I am a stay-at-home mom so we don’t really have extra money to apply to our already huge (to us) mortgage of $1360/month.
Your options with just your current home are to continue paying your mortgage bill, to negotiate with your lender for some kind of short sale (where you sell the home and wipe out your whole mortgage at once), to refinance, or to walk away from the home while taking the huge credit hit in the process.
I would be amazed if you were able to get the credit to buy a second, larger home if you’re finding the payments on your current home to be a challenge. The lending isn’t quick and easy like it was five years ago.
None of these are great solutions, I know, but that’s the reality of the housing market right now. Millions of families are facing the same situation you are. It’s not easy. It’s not fun, either.
Q9: Investing versus loan repayment
My wife and I make about $100,000/yr. We have a substantial amount of debt which were are in the process of working off. The following is a rough summary of our debt:
Credit Cards $8,000 at 0% until 3/2012
Car Loan $16,000 at 2.95%
Mortgage 148,000 at 5.5%
Wife’s Student Loans $86,000 in multiple loans all with rates < 4%
My Student Loans ~ $250,000 in multiple loans; approximately $140,000 of which have rates about 8%; the remainder of which are about 3% (Medical School is very expensive)
Most of my loans – including all of the loans with the 8% interest rate – are in deferment and can stay that way for another two years.
My financial goals are as follows:
1. Pay off our credit card debt.
2. Raise our emergency fund to 3 months worth of expenses.