Davis Motor Sales banner ad
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 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 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 by using one of the social media links below.

2/6/2014 - posted
3/13 - 16
2/6/2014 - posted
3/13 - 16

Most Read This Week

January 28, 2015 17903

UPDATED: Several Involved in Two-Vehicle Accident

in Local (Hopkins) Top News by Doreen Dennis, SurfKY News
January 26, 2015 8800

KSP Arrests Two on Child Porn Charges; MPD…

in Top News For All Sites Touching Hopkins by Trooper Stu Recke
January 25, 2015 8387

Dean’s List Announced

in Top News For All Sites Touching Hopkins by Joyce Riggs
January 28, 2015 7095

Nortonville Man Accused of Meth Possession,…

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Detention Center
January 26, 2015 6435

School Board Votes 3-2 for Utility Tax

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
January 25, 2015 6108

Juvenile Hit by Vehicle at McDonald's

in Local (Muhlenberg) Top News by GPD Officer Wes Miller
January 29, 2015 6097

Man Charged with Sexual Abuse of Child

in Local (Hopkins) Top News by Doreen Dennis, SurfKY News
January 28, 2015 6008

Tax Recall Committee Formed Day After School…

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News

Most Read This Month

January 08, 2015 23320

Woman Claiming to be 'Lady Gaga' Tours Town in…

in Top News For All Sites by Madisonville Police Department
January 15, 2015 22935

UPDATE: Fatality Victim's Name Officially Released

in Top News For All Sites by Doreen Dennis, SurfKY News

Stories Trending Today

January 30, 2015 5273

More Than 800 Gather to Encircle HCCHS

in Local (Hopkins) Top News by Tammy Holloway, SurfKY News
January 31, 2015 5224

24-Year-Old Killed in One-Vehicle Collision

in Top News For All Sites Touching Hopkins by Rita Dukes Smith, SurfKY News Director
January 30, 2015 4933

Woman Arrested for Allegedly Attacking Police…

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Detention Center
January 30, 2015 1969

Hopkins County Sheriff's Arrest Reports - Jan.…

in Hopkins News by Hopkins County Sheriff's Office
January 30, 2015 1964

Madisonville Police Arrest Reports - Jan. 30, 2015

in Hopkins News by Madisonville Police Department
January 30, 2015 1941

No One Left Behind: The Story of 'Sarge'

in General News For All Sites by Lisa Aug
January 29, 2015 1923

Lt. Gov. Luallen, Housing, Veterans Officials…

in General News For All Sites by Office of the Governor
January 30, 2015 1806

Central City Crave Movement Makes Impact in…

in Local (Muhlenberg) Top News by Paul McRee, SurfKY News
January 30, 2015 1745

WKWIB, GRADD, Owensboro's RAE Get Workforce Grants

in General News For All Sites by Kim Brannock
January 30, 2015 1641

Whitfield Works for Protection of U.S. Waters…

in General News For All Sites by Marty Irby
January 30, 2015 1573

Col. Stephen Trigg Chapter SAR Honors Former…

in General News For All Sites by Geoff Baggett
January 30, 2015 1369

Madisonville Fire Reports – Jan. 30, 2015

in Hopkins News by Doreen Dennis, SurfKY News