Pick Your Community: | Hopkins | Muhlenberg | Daviess | Christian | Henderson | Lakes | McCracken | Webster
Davis Motor Sales banner ad
Impressions pre-reset: 420826 Clicks pre-reset: 872

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.

Posted on 2/2/14
3/13 - 16
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
button coupons

Stock Report

1 DOW 17,828.24
+0.49 (0.00%)    
2 S&P 2,067.56
-5.27 (-0.25%)    
3 NASDAQ 4,791.63
+4.31 (0.09%)    
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
button classifieds
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013

Most Read This Week

November 22, 2014 5509

One Injured in Two Vehicle Collision in Greenville

in Local (Muhlenberg) Top News by Miria Thomas
November 24, 2014 3719

Two Charged for Possession of Meth After…

in Local (Muhlenberg) Top News by MCSO/PIO Alex Piper
November 21, 2014 3619

Kentucky Employers to Save About $112 million

in General News For All Sites by Cathy Lindsey
November 25, 2014 2903

Call for Help Results in Arrest for Possession of…

in Local (Hopkins) Top News by Madisonville Police Department
November 25, 2014 2794

Madisonville Man Charged for Selling Cocaine

in Local (Hopkins) Top News by Madisonville Police Department
November 22, 2014 2789

Greenville Representatives Taking Part in Austin,…

in Local (Muhlenberg) Top News by Paul McRee, SurfKY News
November 21, 2014 2604

KSP Announces 'Cram the Cruiser' to Feed the…

in Top News For All Sites Touching Hopkins by Stu Recke
November 22, 2014 2601

SAR Planning 'Triple' Revolutionary War Patriot…

in Local (Muhlenberg) Top News by Geoff Baggett
November 24, 2014 2584

Hopkins County Sheriff's Reports Released

in Hopkins News by Sheila Hopper
November 24, 2014 2515

Madisonville Police Charge Woman with Terroristic…

in Local (Hopkins) Top News by Madisonville Police Department

Stories Trending Today

November 26, 2014 1984

Greene Leaf Boutique Offers Style for Less

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
November 26, 2014 1537

Madisonville Man Charged with Selling Cocaine

in Local (Hopkins) Top News by Lt. William W. Poe
November 27, 2014 1525

Sons of American Revolution Hold Triple Grave…

in Local (Muhlenberg) Top News by Geoff Baggett
November 28, 2014 1426

Authorities Searching for Missing Muhlenberg Man

in Local (Muhlenberg) Top News by MCSO PIO Alex Piper
November 27, 2014 1423

Caretender's Staff Cares About Feeding Needy…

in Top News For All Sites Touching Hopkins by Amber Averitt, SurfKY News
November 26, 2014 1418

Don't Let Your Thanksgiving Go Up in Smoke

in General News For All Sites by Kip Diggs
November 27, 2014 1387

MCTI Presents 'The Santaland Diaries'

in Local (Muhlenberg) Top News by Paul McRee, SurfKY News
November 27, 2014 1340

MSA Thanksgiving Food Box Drive

in Top News For All Sites Touching Hopkins by Joyce Riggs
November 26, 2014 1334

Thanksgiving is Top Day for Cooking Fires

in Top News For All Sites by Ricki Gardenhire
November 26, 2014 1193

Gift Exchange Dos and Don'ts

in General News For All Sites by SurfKY News

SurfKY News Group, Inc.
Corporate Office & Studio
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