Posted on 2/2/14
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
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. your social media marketing partner

LIKE SurfKY on Facebook - Click here to LIKE us now.

© Copyright 2015 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 on social media.

3/13 - 16

Weather Sponsored by

1 DOW 16,472.37
+200.36 (1.23%)    
2 S&P 1,951.36
+27.54 (1.43%)    
3 NASDAQ 4,707.77
+80.69 (1.74%)    

Stock Report Sponsored by

3/13 - 16

Most Read This Week

September 30, 2015 9955

Dawson Woman Dead After Princeton Factory…

by SurfKY News
October 01, 2015 6663

UPDATE: Madisonville Woman Charged after Bank…

by Doreen Dennis, SurfKY News
September 29, 2015 5818

UPDATED: Witness Describes Crash at Dawson…

by Doreen Dennis, SurfKY News
September 28, 2015 4477

Woman Charged with Methamphetamine Possession…

by SurfKY News
September 30, 2015 4016

Four Arrested After Allegedly Exposing Children…

by SurfKY News

Most Read This Month

September 04, 2015 35120

UPDATE: Attack on WKP Never Happened, Say Police

by SurfKY News
September 16, 2015 12019

Mining Accident Fatality - Update

by Doreen Dennis, SurfKY News

Stories Trending Now

October 02, 2015 1580

Mahr Park Project Manager Describes Present,…

by Tammy Holloway, SurfKY News
October 02, 2015 1424

Hopkins County Health Department Food Scores Thru…

by SurfKY News
October 02, 2015 1306

KSP Post 2 Welcomes New Commander

by SurfKY News
October 02, 2015 1194

KSP Arrests Man On Gun Charge

by SurfKY News
October 02, 2015 1109

Madisonville Police Reports Released

by SurfKY News
October 02, 2015 1085

Sinister On Center Horror House Begins Tonight in…

by SurfKY News
October 03, 2015 1031

Happenings, Meetings Listed for Following Week

by Tammy Holloway, SurfKY News
October 02, 2015 819

Elkton Man Charged with Alleged Assault

by SurfKY News
October 02, 2015 782

‘Right-to-Try’ for Terminally Ill Kentuckians: A…

by SurfKY News
October 02, 2015 738

Gov. Beshear, Beam Officials Celebrate Urban…

by SurfKY News