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.

In Other News...

Postal Worker Arrested for Terroristic Threatening, Mail Theft, Menacing

GREENVILLE, Ky. (9/16/14) ― A U.S. Postal Service employee from Greenville has been arrested for menacing, theft of… Read More

National High Attendance Week Activities

HENDERSON, Ky. (9/16/14) — Henderson County Schools is celebrating High Attendance Week from Sept. 15 - 19. The… Read More

Most Read This Week (Site-Wide)

September 15, 2014 4596

Man Accused of Stealing Rural King…

in Top Stories by MCSO PIO Alex Piper
September 15, 2014 4413

Man Accused of Stalking Woman During Her…

in Top Stories by GPD PIO Wes Miller
September 13, 2014 3848

MPD Responds to a Disturbance at Baptist…

in Top Stories by Madisonville Police Department
September 16, 2014 3124

Postal Worker Arrested for Terroristic…

in Top Stories by GPD PIO Wes Miller
September 15, 2014 2183

Man Arrested for DUI, Carrying Concealed…

in Top Stories by Madisonville Police Department

Most Read Stories from Hopkins County

September 13, 2014 3848

MPD Responds to a Disturbance at Baptist…

in Top Stories by Madisonville Police Department
September 15, 2014 2183

Man Arrested for DUI, Carrying Concealed…

in Top Stories by Madisonville Police Department
September 15, 2014 2049

Man Arrested for Being Under Influence of…

in Top Stories by Madisonville Police Department
September 17, 2014 1145

Three Injured in Two-Vehicle Accident

in Top Stories by Kyle Pharris
September 17, 2014 855

Wanted Man Leads Troopers on Chase…

in Top Stories by Trooper Stu Recke

Most Read Stories from Owensboro

September 13, 2014 1620

Audubon Bon Harbor Area Alliance to Host…

in News by Abby Shelton
September 13, 2014 1617

The Gift of Aging Oct. 16

in News by Jennifer Kaminski
September 13, 2014 1572

Dogwood Azalea Neighborhood Alliance to…

in News by Abby Shelton
September 13, 2014 1340

Wesleyan Shawnee Neighborhood Alliance to…

in News by Abby Shelton
September 15, 2014 1007

Owensboro Convention Center Announces…

in News by Madison Strobel

Most Read Stories from Muhlenberg County

September 15, 2014 4596

Man Accused of Stealing Rural King…

in Top Stories by MCSO PIO Alex Piper
September 15, 2014 4413

Man Accused of Stalking Woman During Her…

in Top Stories by GPD PIO Wes Miller
September 16, 2014 3124

Postal Worker Arrested for Terroristic…

in Top Stories by GPD PIO Wes Miller
September 14, 2014 1923

Three Injured in Single-Car Collision

in Top Stories by Robert LIttlepage
September 13, 2014 1696

Local Author Signs Copies of Her New Book

in Top Stories by Charles W. Riley II, SurfKY News

SurfKY News Group, Inc. Central Office & Printing Division
1125 Nebo Rd.  •  Madisonville, KY 42431  •  270.452.2249 (fax)
Main Number: 270.452.2727 (phone)  •  Printing Division Direct Line: 270.821.8600 (phone)


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

social 03social 04social 22social 21social 06