***@*@*** What In The Blue Blazes Wrong With Mortgage Companies!?!?!!!

[Alexander's Horse]

Once you get the mortgage, try and get a redraw facility - that means if you get ahead in your mortgage payments you can redraw that money and only pay the mortgage interest rate. This is the lowest loan interest rate you can get, much better than personal loans or credit card rates. It also means you only have one debt to manage and avoid all the fees and charges of multiple loans. You really get stiffed on personal loans, hire purchase and credit cards. Pay out that furniture loan as fast as you can they are the worst!!!! Then the cars!!!! AAArgh!!! NEVER borrow money to buy depreciating assets like cars!!! (unless you have to - I understand etc.)

Another thing to do if you have outstanding loans is refinance your mortgage once the property you buy goes up in value enough. Then pay out all your loans with higher interest rates and roll them into the mortgage. You will save very large sums of money in interest and lower your weekly repayment overheads substantially.

Also, get a variable interest rate loan and pay extra off whenever you can. This is an excellent way to save money and reduces both the time you take to pay off the mortgage and the interest charges. You can save literally tens of thousands of dollars by cutting the term of your loan this way. Even small additional payments, say 10 dollars extra each payment, add up hugely because of the compound effect. Put any lump sums you get into the mortgage as well and make your repayments weekly rather than monthly. Just doing this cuts the mortgage substantantially because interest is calculated monthly and weekly payments reduce the balance on which this is calculated. Just by paying weekly you actually make a couple of extra payments a year which comes straight off the bottom line of what you owe and has a lasting benefit in terms of interest you never have to pay.

[Adam Smith]

Tiamat:

Check with some banks too. IIRC Bank of America has a program called Acorn which gets first time buyers set up to buy a house. They help you deal with credit issues, set up budgets, hold your hand through the mortgage application and sale process, etc. We sold our old house to a young Hispanic couple who were just starting out and had been through this program. Sellers and agents love to deal with Acorn buyers because they know there will be no surprises which would make the deal fall through at the last minute.

[MattyBoy]

Horse, I suspect that credit cards are quite different in the US. Apparently Americans leave a ton of outstanding debt on their credit cards. Given the numbers that I saw, I would be very surprised if credit card interest rates are as bad there as they are here.

Does anybody know what the interest rates on credit cards are in the US or Aus (after interest free period runs out)? Australian credit card rates used to be insanely high.

[Alexander's Horse]

Maybe, Tiamat would need to check.

[Skanky Burns]

"Low" interest is around 11% (usually with no interest-free period), higher ones are at 15% (with interest free period).
The ones I have access to are anyway.

[Ming]

Originally posted by Skanky Burns
Ming, doesn't that end up costing you money just to bump your credit rating up? Such as all the interest they charge you?

But only marginally. If you borrow at a decent rate, you offset it by the interest earned while you pay the loan off. In the old days, when the stock market was on a roll, you could actually make a profit by investing the money... but those days a long gone for now

[Tiamat]

We'd been told about the credit card idea except wouldn't the fact that he doesn't have much credit keep him from getting that credit card? Are we not banging our head up agains the preverbial wall?

Thanks for the Acorn reference. I will ask about that tomorrow. And the Fannie Mae idea turned out to be a plus for me. I used to work at a club/resturant/sheeeee sheeee pooooo poooo establishment, but one of the members there just recently happened to be appointed one of the new directors ceo type persons at the Fannie Mae foundation. So maybe it's time to look up old friends.