Pick Your Community: | Hopkins | Muhlenberg | Daviess | Christian | Henderson | Lakes | McCracken | Webster

Dave Says - June 23, 2013

davesays300 green2KENTUCKY (6/23/13) – This week Dave discusses 'Is combining them smart?' and 'Retirement blend'

Dear Dave,
My son has a $115,000 mortgage at 5.8 percent. He also has a home equity line of credit of $40,000 at 9 percent. Currently, he can get a 30-year loan at 3.5 percent, or a 15-year note at 2.75 percent. His take-home pay is between $70,000 and $80,000 a year, and these are his only debts. Should he combine the mortgages into one loan? - Daniel

Dear Daniel,
First, I only recommend mortgages of 15 years or less. Now we’re looking at a 2.75 percent loan versus a 5.8 percent loan versus a 9 percent loan. I advise people to put home equity loans under Baby Step 2 of my plan, which is pay off all debt except for the house, provided that the loan is less than half of your annual income. Based on the income figures you gave, this situation is kind of on the bubble.

If I were in your son’s shoes, I’d probably combine the two loans and refinance. I’d go for a new $155,000 fixed-rate mortgage at 2.75 percent, with no balloons and no calls. This kid can live a good life and get the mortgage paid off pretty quickly with the kind of money he’s making.

But if it’s me, I’m getting as short a term as possible on a refinance—maybe even a 10-year note instead of 15 years. Just imagine him getting all this knocked out and still having the majority of his life ahead of him. That’s financial peace! - Dave
 
Dear Dave,
My husband and I are debt-free. Recently I learned that I have a blended fund for retirement. Do you think I should switch to self-chosen funds? I have $26,000 invested at the moment. - Marina

Dear Marina,
My advice is to move your money into self-chosen funds. The problem with blended funds is not that they are blended, but that they’ll move it around based on your age and where they perceive you to be in life. You won’t even realize it’s happening. I want you to be a lot more intentional with your money and know what’s happening every step of the way.

With self-chosen funds you can look at them and say, “Those are my funds.” Then, if down the road you decide one isn’t doing as well as you like, you can move the money to a different fund. With blended funds it’s almost like having a babysitter for your money. You’re not the one watching the kids, and to me that’s a big mistake.

There shouldn’t be a lot of fees inside your 401(k) when it comes to trading funds. There’s a good chance there won’t be any fees at all, especially if you stay within the same company. Check into it, Marina, and talk to your human resources people. They can give you all the details. - Dave

* Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at www.daveramsey.com.
 
 
Disclaimer: The content supplied by columnists and letters to the Editor on this site does not in any way, shape or form, implied or otherwise, necessarily express or suggest endorsement or support of any of such content, statement, or opinions therein. SurfKY News does not necessarily adhere to or endorse content provided by outside non-staff sources.

© Copyright 2014 SurfKY News Group, Inc. All rights reserved. This material may not be published, broadcast, or rewritten without permission. SurfKY News encourages you to share this story by using one of the social media links below.

SurfKY TV

3/13 - 16

Stock Report

1 DOW 16,461.32
-153.49 (-0.92%)    
2 S&P 1,927.11
-14.17 (-0.73%)    
3 NASDAQ 4,382.85
-36.63 (-0.83%)    
3/13 - 16
3/13 - 16

In Other News...

Providence Police Reports Released

PROVIDENCE, Ky. (10/20/14) ― The Providence Police Department released the following arrest reports Monday, Oct. 20.… Read More

Benton Middle School Participates in Clothing Drive

BENTON, Ky. (10/21/14) — As winter approaches, local students will have a need for warmth. With that in mind, Benton… Read More
3/13 - 16

Most Read This Week

October 17, 2014 12116

UK Women's Soccer Welcomes Ole Miss, No. 5/4…

in General Sports For All Sites by UK Athletics
October 20, 2014 5855

Uncle Lee's in Greenville is Closing Its Doors…

in Local (Muhlenberg) Top News by www.unclelees.com
October 17, 2014 4005

Single Vehicle Collision Results in One Injury

in Local (Muhlenberg) Top News by Trooper S. C. Recke
October 19, 2014 3889

Kentucky Energy Department Releases Virtual Solar…

in General News For All Sites by Dick Brown
October 16, 2014 3185

Madisonville Police Arrest Reports - Oct. 16, 2014

in Hopkins News by Madisonville Police Department
October 21, 2014 3152

UPDATE: Pedestrian Struck by Vehicle on Shamrock…

in Local (Hopkins) Top News by Officer C.P. Haynie
October 18, 2014 2845

Muhlenberg County Celebrates New Farmer’s Market

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
October 17, 2014 2806

Woman Arrested at Taco Bell for DUI

in Local (Hopkins) Top News by Madisonville Police Department
October 17, 2014 2773

Madisonville Police Arrest Reports - Oct. 17, 2014

in Hopkins News by Madisonville Police Department
October 20, 2014 2709

Man Charged for Assaulting Pregnant Wife

in Local (Hopkins) Top News by Madisonville Police Department

Stories Trending Today

October 21, 2014 3152

UPDATE: Pedestrian Struck by Vehicle on Shamrock…

in Local (Hopkins) Top News by Officer C.P. Haynie
October 20, 2014 2076

Hopkins County Board of Education Recognizes…

in Local (Hopkins) Top News by Tammy Holloway, SurfKY News
October 21, 2014 2034

Madisonville Police Arrest Reports - Oct. 21, 2014

in Hopkins News by Madisonville Police Department
October 21, 2014 1958

Man Charged for Switching Plates on Vehicle;…

in Local (Hopkins) Top News by Madisonville Police Department
October 22, 2014 1790

Failure to Signal Ends in Drug Arrest

in Local (Hopkins) Top News by Madisonville Police Department
October 20, 2014 1694

Providence Police Reports Released

in Local (Webster) Top News by Chief Brent McDowell
October 21, 2014 1658

Arrival of Overpass Beams for I-69/Pennyrile Pkwy…

in General News For All Sites Touching Hopkins by Keith Todd
October 21, 2014 1502

Alliance for a Drug-Free Owensboro-Daviess County…

in Owensboro News by Carla Shelton
October 21, 2014 1369

Meade County Set to Host Third Region Boys'…

in General Sports For All Sites by Steve LeMaster
October 21, 2014 1240

RWRA Sewer Repairs Starting Tomorrow

in Owensboro News by Abby Shelton

SurfKY News Group, Inc.
1125 Nebo Rd.  •  Madisonville, KY 42431
270.452.2727 (phone)
  •  270.452.2249 (fax)


Contact a member of our staff: www.surfky.com/contact
Copyright © 2014 SurfKY News Group, Inc.  •  Terms of Use  •  Site Map

social fbsocial twsocial yt
social gpsocial flrsocial rss