What to do w/ $60k Lump Sum?
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What to do w/ $60k Lump Sum?
So here's the situation. I am selling a property and will walk away with roughly $60k at closing. I have the following debt/situations:
1) Current house - only put 3% down on a $362k house so I pay PMI. The PMI is $192 a month and my interest rate is 3.5% for 20 years. There is no length of time I need to keep PMI. However, I just bought the house in December 2016 so appraisal may not be much more. Would probably need 40-45k to get rid of PMI and pay $450 appraisal fee. Or it will automatically be gone in 2022 naturally.
2) Student loans - I owe $45k in student loans and my interest rate is variable at 3.8%. I currently pay $472 for 10 years.
3) Car loan - I have a car loan originally of $36k with $26k left. I pay $500 a month and the interest rate is 2.24%. Currently dealers have offered me $24k as a trade or at Carmax. I could buy a 15k RAV 4 or something similiar with low miles.
4) I have $10k on a zero percent credit not due till August 2018. I am confident I could just pay this off monthly.
Some thoughts I have are to pay $40k off my mortgage and put the rest of the $20k into my student loans. This doesn't immediately help my payments but I would be closer to paying them off. Or do the reverse pay off student loans then pay some off on the mortgage.
Thoughts?
1) Current house - only put 3% down on a $362k house so I pay PMI. The PMI is $192 a month and my interest rate is 3.5% for 20 years. There is no length of time I need to keep PMI. However, I just bought the house in December 2016 so appraisal may not be much more. Would probably need 40-45k to get rid of PMI and pay $450 appraisal fee. Or it will automatically be gone in 2022 naturally.
2) Student loans - I owe $45k in student loans and my interest rate is variable at 3.8%. I currently pay $472 for 10 years.
3) Car loan - I have a car loan originally of $36k with $26k left. I pay $500 a month and the interest rate is 2.24%. Currently dealers have offered me $24k as a trade or at Carmax. I could buy a 15k RAV 4 or something similiar with low miles.
4) I have $10k on a zero percent credit not due till August 2018. I am confident I could just pay this off monthly.
Some thoughts I have are to pay $40k off my mortgage and put the rest of the $20k into my student loans. This doesn't immediately help my payments but I would be closer to paying them off. Or do the reverse pay off student loans then pay some off on the mortgage.
Thoughts?
Last edited by Broadway2018 on Mon May 22, 2017 1:53 pm, edited 1 time in total.
Re: What to do w/ $60k Lump Sum?
If it were me, and it's not, I would pay off the student loan.
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Re: What to do w/ $60k Lump Sum?
I would pay off the student loan and the credit card, and put what's left toward the car. Then put what you were paying on the student loan and card towards the rest of the car note each month and knock it out. Once those are all done, you've got over $1000 per month cash flow freed up to start working on getting rid of PMI on the house.
Re: What to do w/ $60k Lump Sum?
Contact your bank and find out the exact rules for removing PMI. These can be complicated. That's $192/month that is serving no useful purpose for you. This would be my top priority.
I don't get those who are saying you should pay off your student loans. 3.5% mortgage vs. 3.8% student loan rate is a negligible difference, except that getting rid of PMI (which offers you no benefit) would free up $2500/year. That's real money. Take that savings and use it to pay down your other debt, if you want. Of course, your student loan interest may be deductible, depending on your income.
I don't get those who are saying you should pay off your student loans. 3.5% mortgage vs. 3.8% student loan rate is a negligible difference, except that getting rid of PMI (which offers you no benefit) would free up $2500/year. That's real money. Take that savings and use it to pay down your other debt, if you want. Of course, your student loan interest may be deductible, depending on your income.
Re: What to do w/ $60k Lump Sum?
I'd pay whatever is required to get rid of the PMI, then apply the remainder to the student loans.
For the student loans, I'd list them in interest rate order, from high to low, then start from the top when paying them off. Any extra money in the future should be applied toward the student loans in that order.
For the student loans, I'd list them in interest rate order, from high to low, then start from the top when paying them off. Any extra money in the future should be applied toward the student loans in that order.
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Re: What to do w/ $60k Lump Sum?
Unfortunately, I make too much to deduct student loan interest. I did find out I would need to pay $450 for an appraisal and I am guessing my house would not appraise for more than $375k (lowest would be $365k which is from December 2016). Then the bank (Chase) said they could remove PMI after I pay the remainder. I am calculating this to be about $44k.
Re: What to do w/ $60k Lump Sum?
Even if you pay for the appraisal, it's still worth it. You'll make up the cost within 3 months.kwarden13 wrote:Unfortunately, I make too much to deduct student loan interest. I did find out I would need to pay $450 for an appraisal and I am guessing my house would not appraise for more than $375k (lowest would be $365k which is from December 2016). Then the bank (Chase) said they could remove PMI after I pay the remainder. I am calculating this to be about $44k.
Re: What to do w/ $60k Lump Sum?
I would pay off the entire student loan and throw the remaining $15k to your mortgage, bringing your end of PMI date that much closer.
Re: What to do w/ $60k Lump Sum?
I'd pay off the student loan (given the variable interest rates, it's likely to go up), then pay off the $10k credit (even at 0%, you're probably still paying some monthly minimum amount, and you're eventually going to have to pay it off anyways, so why not now?), and then throw the remaining $5k at either your emergency fund or the mortgage.kwarden13 wrote:So here's the situation. I am selling a property and will walk away with roughly $60k at closing. I have the following debt/situations:
1) Current house - only put 3% down on a $362k house so I pay PMI. The PMI is $192 a month and my interest rate is 3.5% for 20 years. There is no length of time I need to keep PMI. However, I just bought the house in December 2016 so appraisal may not be much more. Would probably need 40-45k to get rid of PMI and pay $450 appraisal fee. Or it will automatically be gone in 2022 naturally.
2) Student loans - I owe $45k in student loans and my interest rate is variable at 3.8%. I currently pay $472 for 10 years.
3) Car loan - I have a car loan originally of $36k with $26k left. I pay $500 a month and the interest rate is 2.24%. Currently dealers have offered me $24k as a trade or at Carmax. I could buy a 15k RAV 4 or something similiar with low miles.
4) I have $10k on a zero percent credit not due till August 2018. I am confident I could just pay this off monthly.
Some thoughts I have are to pay $40k off my mortgage and put the rest of the $20k into my student loans. This doesn't immediately help my payments but I would be closer to paying them off. Or do the reverse pay off student loans then pay some off on the mortgage.
Thoughts?
Those steps will improve your cashflow going forward, which will make progress quicker on paying off debts/investing/reaching other goals.
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Re: What to do w/ $60k Lump Sum?
Sell the car and get the 15k one. Pay off the credit card and student loans. You now have way more cash available each month to throw at your mortgage, or whatever else you feel like.
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Re: What to do w/ $60k Lump Sum?
I would do this....tylerherman wrote:Sell the car and get the 15k one. Pay off the credit card and student loans. You now have way more cash available each month to throw at your mortgage, or whatever else you feel like.
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Re: What to do w/ $60k Lump Sum?
Isn't paying the mortgage balance down to below PMI levels equivalent of getting a nearly guaranteed 8.2% return?
The PMI is $192/mo for 54 months or $10,400. Subtract out some administrative expenses. On $44K, that's 23.5% or 4.7% a year. Plus the 3.5% of the actual mortgage rate. That's 8.2%.
What am I missing here?
The PMI is $192/mo for 54 months or $10,400. Subtract out some administrative expenses. On $44K, that's 23.5% or 4.7% a year. Plus the 3.5% of the actual mortgage rate. That's 8.2%.
What am I missing here?
Last edited by casualflower on Mon May 22, 2017 3:56 pm, edited 1 time in total.
Re: What to do w/ $60k Lump Sum?
I'm not understanding why you would need an appraisal to remove PMI.
I understand what the appraisal is for and how the math works.
I could see if you couldn't come up with enough cash to get to say 79% LTV where the bank should remove the PMI.
anyways, I'd focus on removing the PMI
I understand what the appraisal is for and how the math works.
I could see if you couldn't come up with enough cash to get to say 79% LTV where the bank should remove the PMI.
anyways, I'd focus on removing the PMI
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Re: What to do w/ $60k Lump Sum?
I dont believe you're missing anything - I totally agree.metrunt wrote:Isn't paying the mortgage balance down to below PMI levels equivalent of getting a nearly guaranteed 8.2% return?
The PMI is $192/mo for 54 months or $10,400. Subtract out some administrative expenses. On $44K, that's 23.5% or 4.7% a year. Plus the 3.5% of the actual mortgage rate. That's 8.2%.
What am I missing here?
To get out of PMI my wife and I just refinanced into a traditional loan and brought money to the table. The house did need appraisal to secure the loan, but that wasn't an issue for us (home value stayed the same as when we purchased it).
I'm not sure why so many people are saying to pay off the student loans before the PMI. Find out how much you need to bring to the table to either remove PMI on your current loan, or else refinance into a conventional loan. I'd do that before anything else.
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Re: What to do w/ $60k Lump Sum?
Ok so my plan is to find out exactly how much I need to get out of PMI. Also, all remaining funds will go to the student loan.
As far as trading in my car...I was looking at RAV4's and found one at $15k with low miles. However, there are a ton of Hyundai Sonota's at $10k with low miles and still have warranty left since it is a 100k warranty. Anyone have experience with Hyundai's?
As far as trading in my car...I was looking at RAV4's and found one at $15k with low miles. However, there are a ton of Hyundai Sonota's at $10k with low miles and still have warranty left since it is a 100k warranty. Anyone have experience with Hyundai's?
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Re: What to do w/ $60k Lump Sum?
If you are making too much to deduct the interest on your loan I suspect the car you have is fine. Enjoy it.
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Last edited by NotWhoYouThink on Mon May 22, 2017 7:40 pm, edited 1 time in total.
Re: What to do w/ $60k Lump Sum?
I'd keep the car too.
You're -2k if you get 24k towards your 26k loan.
Then add 15k plus tax and tags and you are probably at a loan that is just a few thousand less than your current loan. (15+2+2?= 19k)
You're -2k if you get 24k towards your 26k loan.
Then add 15k plus tax and tags and you are probably at a loan that is just a few thousand less than your current loan. (15+2+2?= 19k)
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Re: What to do w/ $60k Lump Sum?
Is the $60k that you "will walk away with after closing" take into account any Federal or state (if applicable) income taxes that you may/will owe?
bill
bill
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Re: What to do w/ $60k Lump Sum?
According to my accountant, I will owe taxes on the depreciation I took (rental property).I lived in it 2 out of the 5 years and am selling prior to the 5 years being up. I will owe about $3600 in taxes.
Re: What to do w/ $60k Lump Sum?
CoAndy wrote:I would pay off the entire student loan and throw the remaining $15k to your mortgage, bringing your end of PMI date that much closer.
+1
Re: What to do w/ $60k Lump Sum?
JacobyTT wrote:Contact your bank and find out the exact rules for removing PMI. These can be complicated. That's $192/month that is serving no useful purpose for you. This would be my top priority.
I don't get those who are saying you should pay off your student loans. 3.5% mortgage vs. 3.8% student loan rate is a negligible difference, except that getting rid of PMI (which offers you no benefit) would free up $2500/year. That's real money. Take that savings and use it to pay down your other debt, if you want. Of course, your student loan interest may be deductible, depending on your income.
The student loan monthly payment is more than the PMI amount. Pay off the student loan and there is better cash flow. Now take student loan amt and apply to other loans.
For me, cash flow is King.
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Re: What to do w/ $60k Lump Sum?
Prioritizing cash flow provides near term flexibility, but it does not look to me like the way to maximize long term financial condition.Dottie57 wrote:For me, cash flow is King.
I concur with metrunt. You can't get 8.2% (give or take) guaranteed return anywhere.
As long as you have a comfortable emergency fund and stable job, can handle the income taxes, have taken into account excise taxes, realtors fees, etc, I would make getting rid of the PMI the first priority.
That will still improve his cash flow, which can then be used to attack the student debt, which is the next highest rate (just don't lose sight of when you need to pay off that 0% loan).
Student loan debt first for better short term cash flow is not an unreasonable strategy, but it doesn't appear to be the best option.
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Re: What to do w/ $60k Lump Sum?
Thank you, everyone, for the advice! So many options given the amount of debt I have. I will let you know when I decide. I am now leaning more towards mortgage payoff to eliminate PMI, however, very skeptical of the bank requiring a $450 appraisal up front.
Re: What to do w/ $60k Lump Sum?
I'd go for getting rid of the PMI first.
Why because you are paying 192 each month, so 2304 goes to this. Divide by 45K, and this turns out to be effectively a loan at 5.12%. As the amount of money needed to get rid of PMI decreases over time (as you have more equity) effectively this interest rate increases. So at 20K needed you have an effective rate of 11.52%. Yikes! The best part of getting rid of PMI, you now have freed up 198 in your budget for debt reduction. Also you probably won't come across this kind of lump sum any time soon, so use it wisely.
That would leave about 15K. Seemingly contradictory to the first step, I would get rid of the credit card debt. This again would free up money toward more debt reduction and greatly reduce risk. 0% credit card financing offers often turn into partially paid off balances that are now at 16-21%. Get rid of it.
Next tackle the car. You still have 5k, start with that. By my calculations you should be able to pay $1406/month (10K/14=714 from CC, 192 from PMI, 500 from car payment). This puts you at being done with the car in 15 months.
Next the Student loan. You should have $1878/month to put towards this. By that time you should be at about 5K paid off in 15 months from the 472 being paid. So you will owe about 40K. Also hopefully you got a raise or two. Lets say you are now able to throw 2K or more at this loan per month. Shoot to have this done in 18 months.
So in 33 months you could have no consumer debt, and no PMI. The key is sticking with it and not using the newly found money to go on vacations or increase your eating out budget.
Why because you are paying 192 each month, so 2304 goes to this. Divide by 45K, and this turns out to be effectively a loan at 5.12%. As the amount of money needed to get rid of PMI decreases over time (as you have more equity) effectively this interest rate increases. So at 20K needed you have an effective rate of 11.52%. Yikes! The best part of getting rid of PMI, you now have freed up 198 in your budget for debt reduction. Also you probably won't come across this kind of lump sum any time soon, so use it wisely.
That would leave about 15K. Seemingly contradictory to the first step, I would get rid of the credit card debt. This again would free up money toward more debt reduction and greatly reduce risk. 0% credit card financing offers often turn into partially paid off balances that are now at 16-21%. Get rid of it.
Next tackle the car. You still have 5k, start with that. By my calculations you should be able to pay $1406/month (10K/14=714 from CC, 192 from PMI, 500 from car payment). This puts you at being done with the car in 15 months.
Next the Student loan. You should have $1878/month to put towards this. By that time you should be at about 5K paid off in 15 months from the 472 being paid. So you will owe about 40K. Also hopefully you got a raise or two. Lets say you are now able to throw 2K or more at this loan per month. Shoot to have this done in 18 months.
So in 33 months you could have no consumer debt, and no PMI. The key is sticking with it and not using the newly found money to go on vacations or increase your eating out budget.
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Re: What to do w/ $60k Lump Sum?
I like the outlined approach above. However, would you recommend getting rid of the car? That would cut my debt down and now I have been looking at getting a $10k car (pay cash). I am on the fence about this mainly because I do not drive to work and work at home. So having such an expensive car is hard to justify when it sits in the garage. On the other hand, I already paid $10k into the car and it's a Subaru.djpeteski wrote:I'd go for getting rid of the PMI first.
Why because you are paying 192 each month, so 2304 goes to this. Divide by 45K, and this turns out to be effectively a loan at 5.12%. As the amount of money needed to get rid of PMI decreases over time (as you have more equity) effectively this interest rate increases. So at 20K needed you have an effective rate of 11.52%. Yikes! The best part of getting rid of PMI, you now have freed up 198 in your budget for debt reduction. Also you probably won't come across this kind of lump sum any time soon, so use it wisely.
That would leave about 15K. Seemingly contradictory to the first step, I would get rid of the credit card debt. This again would free up money toward more debt reduction and greatly reduce risk. 0% credit card financing offers often turn into partially paid off balances that are now at 16-21%. Get rid of it.
Next tackle the car. You still have 5k, start with that. By my calculations you should be able to pay $1406/month (10K/14=714 from CC, 192 from PMI, 500 from car payment). This puts you at being done with the car in 15 months.
Next the Student loan. You should have $1878/month to put towards this. By that time you should be at about 5K paid off in 15 months from the 472 being paid. So you will owe about 40K. Also hopefully you got a raise or two. Lets say you are now able to throw 2K or more at this loan per month. Shoot to have this done in 18 months.
So in 33 months you could have no consumer debt, and no PMI. The key is sticking with it and not using the newly found money to go on vacations or increase your eating out budget.
Re: What to do w/ $60k Lump Sum?
While all the options presented are viable, I am curious about your personal circumstances. How long have you been in the workforce? What is your income/savings range? Do you have an emergency fund? Retirement account? ...kwarden13 wrote:I like the outlined approach above. However, would you recommend getting rid of the car? That would cut my debt down and now I have been looking at getting a $10k car (pay cash). I am on the fence about this mainly because I do not drive to work and work at home. So having such an expensive car is hard to justify when it sits in the garage. On the other hand, I already paid $10k into the car and it's a Subaru.djpeteski wrote:I'd go for getting rid of the PMI first.
Why because you are paying 192 each month, so 2304 goes to this. Divide by 45K, and this turns out to be effectively a loan at 5.12%. As the amount of money needed to get rid of PMI decreases over time (as you have more equity) effectively this interest rate increases. So at 20K needed you have an effective rate of 11.52%. Yikes! The best part of getting rid of PMI, you now have freed up 198 in your budget for debt reduction. Also you probably won't come across this kind of lump sum any time soon, so use it wisely.
That would leave about 15K. Seemingly contradictory to the first step, I would get rid of the credit card debt. This again would free up money toward more debt reduction and greatly reduce risk. 0% credit card financing offers often turn into partially paid off balances that are now at 16-21%. Get rid of it.
Next tackle the car. You still have 5k, start with that. By my calculations you should be able to pay $1406/month (10K/14=714 from CC, 192 from PMI, 500 from car payment). This puts you at being done with the car in 15 months.
Next the Student loan. You should have $1878/month to put towards this. By that time you should be at about 5K paid off in 15 months from the 472 being paid. So you will owe about 40K. Also hopefully you got a raise or two. Lets say you are now able to throw 2K or more at this loan per month. Shoot to have this done in 18 months.
So in 33 months you could have no consumer debt, and no PMI. The key is sticking with it and not using the newly found money to go on vacations or increase your eating out budget.
Besides, I thought that you need to be at 20% LTV to get rid of PMI. And from what I am reading - correct me if I am wrong - you have 3% down, i.e., about 10k. To get to 20% LTV, won't you need to have about 72k in equity? If, like you said, the house has not appreciated much, you would need 50-60k to get out of PMI. Does that sound about right? Why did you say 40-45k?
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Re: What to do w/ $60k Lump Sum?
I'm not sure if you should keep the car or not, but I do want to point out that what you've already paid into the car should not be a factor in your decision. It's a pretty common error, but the past is the past and those costs have sunk.kwarden13 wrote:On the other hand, I already paid $10k into the car...
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Re: What to do w/ $60k Lump Sum?
To answer some questions... I am 28 years old and make roughly $125k. My fiance and I live together and she makes $90k. We have some debt, such as student loans, car payments, credit cards. We have a small emergency fund, not much, but not too worried since the house is brand new construction and both cars are new. I am trying to max out retirement this year at $18k (currently have about $60k in my 401k) and have a pension. My fiance also has a 401k and pension - not sure how much is in hers. We haven't really combined everything, we just split stuff 50/50 for now.an_asker wrote:While all the options presented are viable, I am curious about your personal circumstances. How long have you been in the workforce? What is your income/savings range? Do you have an emergency fund? Retirement account? ...kwarden13 wrote:I like the outlined approach above. However, would you recommend getting rid of the car? That would cut my debt down and now I have been looking at getting a $10k car (pay cash). I am on the fence about this mainly because I do not drive to work and work at home. So having such an expensive car is hard to justify when it sits in the garage. On the other hand, I already paid $10k into the car and it's a Subaru.djpeteski wrote:I'd go for getting rid of the PMI first.
Why because you are paying 192 each month, so 2304 goes to this. Divide by 45K, and this turns out to be effectively a loan at 5.12%. As the amount of money needed to get rid of PMI decreases over time (as you have more equity) effectively this interest rate increases. So at 20K needed you have an effective rate of 11.52%. Yikes! The best part of getting rid of PMI, you now have freed up 198 in your budget for debt reduction. Also you probably won't come across this kind of lump sum any time soon, so use it wisely.
That would leave about 15K. Seemingly contradictory to the first step, I would get rid of the credit card debt. This again would free up money toward more debt reduction and greatly reduce risk. 0% credit card financing offers often turn into partially paid off balances that are now at 16-21%. Get rid of it.
Next tackle the car. You still have 5k, start with that. By my calculations you should be able to pay $1406/month (10K/14=714 from CC, 192 from PMI, 500 from car payment). This puts you at being done with the car in 15 months.
Next the Student loan. You should have $1878/month to put towards this. By that time you should be at about 5K paid off in 15 months from the 472 being paid. So you will owe about 40K. Also hopefully you got a raise or two. Lets say you are now able to throw 2K or more at this loan per month. Shoot to have this done in 18 months.
So in 33 months you could have no consumer debt, and no PMI. The key is sticking with it and not using the newly found money to go on vacations or increase your eating out budget.
Besides, I thought that you need to be at 20% LTV to get rid of PMI. And from what I am reading - correct me if I am wrong - you have 3% down, i.e., about 10k. To get to 20% LTV, won't you need to have about 72k in equity? If, like you said, the house has not appreciated much, you would need 50-60k to get out of PMI. Does that sound about right? Why did you say 40-45k?
As far as the PMI....I said 40-45k since I expect out appraisal will come in around $380k. Reasons are we put $20k into the house since January 2017 and houses have been selling for about $400k in the neighborhood next store. Our last appraisal had two numbers, $363k and $375k. So I guess hoping to get appraised around $380k. Its a gamble with paying $450 for an appraisal but if it works, we can get rid of the PMI. If it doesnt, I will probably just pay student loans off.
Re: What to do w/ $60k Lump Sum?
When you receive differing advice like this where it seems split 50-50, it likely means that either approach will serve you well (assuming the people offering advice are doing so in your best interest, which is true on bh ). Personally I agree that addressing the PMI first is likely the best financial choice, but addressing some of the smaller debts provides the emotional satisfaction of finishing something, so either way works.kwarden13 wrote:I am now leaning more towards mortgage payoff to eliminate PMI, however, very skeptical of the bank requiring a $450 appraisal up front.
Why are you worried about a $450 appraisal? Compared to $80k in debt beyond the house, this is truly inconsequential. Another way to look at it is that it's only 2 months of your PMI payment!
I would sell the car. Several of my friends are happy with their Hyundai's and it seems that the Hyundai reputation has only improved over time. Knocking out ~15k of the debt will feel great!
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Re: What to do w/ $60k Lump Sum?
OP couple of thoughts about the PMI:
1.) Get the appraisal, if the appraisal comes in closer to $400K as your say properties in the next neighborhood are selling for then things start looking rosier. Given that you put 20K into the house and had very recent appraisals in the 360-375K range prior to your renovations I'd expect it to appraise at least at the 380K mark as you're posturing unless there has been softening in your market.
to play devil's advocate:
2.) Any thought about wiping out the student loans and paying the rest towards your car while simultaneously refinancing it? This would cut the amount owed on your car to roughly 10K this with the elimination of your student loan payment could up your monthly cash flow by $650+
Just a passing thought on the 2nd one if you value cash flow more.
Best,
BB
1.) Get the appraisal, if the appraisal comes in closer to $400K as your say properties in the next neighborhood are selling for then things start looking rosier. Given that you put 20K into the house and had very recent appraisals in the 360-375K range prior to your renovations I'd expect it to appraise at least at the 380K mark as you're posturing unless there has been softening in your market.
to play devil's advocate:
2.) Any thought about wiping out the student loans and paying the rest towards your car while simultaneously refinancing it? This would cut the amount owed on your car to roughly 10K this with the elimination of your student loan payment could up your monthly cash flow by $650+
Just a passing thought on the 2nd one if you value cash flow more.
Best,
BB
Re: What to do w/ $60k Lump Sum?
Get rid of PMI....it serves absolutely no purpose. If you are confident the new appraised value will come in high enough to get you out of PMI, then the $450 is a nothingburger in the grand scheme of things.
You also may not need to put down the entire 60K which would be great. Then you can put some additional funds towards the CC or Car!
You also may not need to put down the entire 60K which would be great. Then you can put some additional funds towards the CC or Car!
Re: What to do w/ $60k Lump Sum?
I don't have experience with PMI (or getting rid of them). So, I hope you know exactly how the appraisal will work in removing the PMI, in the sense that I don't have a clue who does the appraisal (whether it is you, then you inform the lender, or whether the lender has to send their approved appraiser). If you can get rid of the PMI in one fell swoop, I think there's no better option. If, for whatever reason, you're unable to do so, I agree with the others that getting rid of the student loans is the first priority (this is assuming that you are absolutely sure that you'll get rid of that credit card debt within the 0% timeframe).kwarden13 wrote:To answer some questions... I am 28 years old and make roughly $125k. My fiance and I live together and she makes $90k. We have some debt, such as student loans, car payments, credit cards. We have a small emergency fund, not much, but not too worried since the house is brand new construction and both cars are new. I am trying to max out retirement this year at $18k (currently have about $60k in my 401k) and have a pension. My fiance also has a 401k and pension - not sure how much is in hers. We haven't really combined everything, we just split stuff 50/50 for now.an_asker wrote:[...]While all the options presented are viable, I am curious about your personal circumstances. How long have you been in the workforce? What is your income/savings range? Do you have an emergency fund? Retirement account? ...
Besides, I thought that you need to be at 20% LTV to get rid of PMI. And from what I am reading - correct me if I am wrong - you have 3% down, i.e., about 10k. To get to 20% LTV, won't you need to have about 72k in equity? If, like you said, the house has not appreciated much, you would need 50-60k to get out of PMI. Does that sound about right? Why did you say 40-45k?
As far as the PMI....I said 40-45k since I expect out appraisal will come in around $380k. Reasons are we put $20k into the house since January 2017 and houses have been selling for about $400k in the neighborhood next store. Our last appraisal had two numbers, $363k and $375k. So I guess hoping to get appraised around $380k. Its a gamble with paying $450 for an appraisal but if it works, we can get rid of the PMI. If it doesnt, I will probably just pay student loans off.
Re: What to do w/ $60k Lump Sum?
Parents bought a Sonata from Enterprise car sales. The warranty isn't for 100K when transferred, it was I believe cut in 1/2.kwarden13 wrote:Ok so my plan is to find out exactly how much I need to get out of PMI. Also, all remaining funds will go to the student loan.
As far as trading in my car...I was looking at RAV4's and found one at $15k with low miles. However, there are a ton of Hyundai Sonota's at $10k with low miles and still have warranty left since it is a 100k warranty. Anyone have experience with Hyundai's?
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Re: What to do w/ $60k Lump Sum?
Good to know...I did not realize that. The main reason I was looking is they are so cheap.IMO wrote:Parents bought a Sonata from Enterprise car sales. The warranty isn't for 100K when transferred, it was I believe cut in 1/2.kwarden13 wrote:Ok so my plan is to find out exactly how much I need to get out of PMI. Also, all remaining funds will go to the student loan.
As far as trading in my car...I was looking at RAV4's and found one at $15k with low miles. However, there are a ton of Hyundai Sonota's at $10k with low miles and still have warranty left since it is a 100k warranty. Anyone have experience with Hyundai's?