Pick Your Community: | Hopkins | Muhlenberg | Daviess | Christian | Henderson | Lakes | McCracken | Webster
Davis Motor Sales banner ad

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
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
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

Most Read This Week

October 20, 2014 6709

Uncle Lee's in Greenville is Closing Its Doors…

in Local (Muhlenberg) Top News by www.unclelees.com
October 19, 2014 4511

Kentucky Energy Department Releases Virtual Solar…

in General News For All Sites by Dick Brown
October 18, 2014 3450

Muhlenberg County Celebrates New Farmer’s Market

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
October 21, 2014 3423

UPDATE: Pedestrian Struck by Vehicle on Shamrock…

in Local (Hopkins) Top News by Officer C.P. Haynie
October 20, 2014 2854

Man Charged for Assaulting Pregnant Wife

in Local (Hopkins) Top News by Madisonville Police Department
October 22, 2014 2697

Hopkins County Grand Jury Indictments

in Hopkins News by Karen McKnight
October 21, 2014 2671

Madisonville Police Arrest Reports - Oct. 21, 2014

in Hopkins News by Madisonville Police Department
October 23, 2014 2666

Resident Returns Home to People Using Drugs,…

in Local (Hopkins) Top News by Madisonville Police Department
October 20, 2014 2461

Hopkins County Sheriff's Arrest Reports Released

in Hopkins News by Sheila Hopper
October 22, 2014 2314

Failure to Signal Ends in Drug Arrest

in Local (Hopkins) Top News by Madisonville Police Department

Stories Trending Today

October 23, 2014 2666

Resident Returns Home to People Using Drugs,…

in Local (Hopkins) Top News by Madisonville Police Department
October 23, 2014 1882

Man Arrested for Endangering Welfare of Minor

in Local (Hopkins) Top News by Madisonville Police Department
October 23, 2014 1670

Muhlenberg District Court Fines Handed Down

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
October 23, 2014 1649

Madisonville Police Arrest Reports - Oct. 23, 2014

in Hopkins News by Madisonville Police Department
October 23, 2014 1573

Hopkins County Health Department Food Scores Thru…

in Hopkins News by Lisa Miller
October 22, 2014 1271

Build, Go and Grow Regional Entrepreneurship…

in Top News For All Sites Touching Hopkins by Patricia Wiles
October 23, 2014 1054

America Should Not Go Greek in the Bathroom

in General News For All Sites by Dr. Glenn Mollette
October 22, 2014 1009

Come Monster Mash at the Museum This Saturday

in General News For All Sites by National Corvette Museum
October 23, 2014 999

Vocational Rehabilitation Seeks Public Input Nov.…

in General News For All Sites by Kim Brannock
October 23, 2014 852

UPDATE: Crime Stoppers Fugitive of the Week –…

in Local (Hopkinsville) Top News by Paul Ray

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