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Found 3 results

  1. I'm going to start to go back to college this upcoming fall term. Going to Pitt and only taking one class, it will cost a bit over $3k (4credit class + materials). Now my company is paying for it, depending on the grade I get. A = 100%, B = 90%, C = 80%... etc and will be paid immediately upon turning in my final grade w/ receipts. Pulling that money from my savings would kill me. Would I be better putting it onto a credit card or pulling a loan from my 401k? And can someone please explain to me how I would do that and what all must be considered with a 401k loan? I've never done anything with my 401k other than put money in. Thank you!
  2. Hi Guys! I recently paid off my car and will be ahead 400 a month starting this month! Woohoo! Unfortunately I need to do my timing belt and need to take care of a few leaks...blah blah, anyway it's going to cost me about 1800 bucks I have the money in savings but I plan on buying a house this summer so I didn't want to dip into any off that. I was curious to know what everyone's opinion was on borrowing from your 401k? I have about 30k with fidelity. If I borrowed 1800 and set a tern of 24 months , I'd roughly have about 75 bucks deducted from each paycheck. I believe the interest rate with fidelity is about 4% , all of my cc are at 18% or more. Would like to hear everyone's opinion. Thanks!
  3. CharLyn

    Just sharing

    I have been curious lately how far lenders will go these days to approve a mortgage. It seems like they have tightened up lending based on what I read, but I wanted to share with everyone a case where a mortgage was approved and I truley did not think it would have been or should have been. This was not for me, but someone close to me and although I tried to talk some sense into her, you know how we can be when we want something- it doesn't matter at what cost or if it is wise. Here are the facts: Good credit score >720 2nd home purchase, 1st home is currently a month to month rental with maybe $15k equity- rental income was not used to qualify. Purchase price of new home $270,000 3.5% down, FHA loan Seller paid closing costs. DTI- 55% This person has a good job with longeveity and makes ~$90k per year. What gets me, is the DTI and what she had to do to get that DTI. I think a responsible underwriter would have not approved this loan, but maybe they don't see what I see and maybe in the end they just don't care. A year ago, she took out an unsecured loan for $30k to pay off a $20k credit card that she was over the limit on. She also had another credit card that was close to being maxed out at $20k. She paid off the 1st credit card and spent the remaining $10k of the insecured loan. She then proceeded to put another $10k on the credit card she just took a loan to pay off. So instead of reducing her debt as planned, she increased her debt by $20k. She decided to buy this 2nd home. To qualify at a 55% back end ratio, she had to pay off her credit cards. To do this, she took out a 5 year 401k loan of $42k which is half of her 401k. She paid off $30k in credit cards and used the remaining towards her down payment etc... Her payments back to herself with be roughly $750 per month for the next 5 years which is not calculated into the DTI. To close, she had to show proof that she closed the credit card accounts. She had already started charging on one of them (within 1 week of paying them off). When she called the credit card companies, she made sure she would be able to reopen the accounts once she closed on the house- which of course they assured her "yes", she can repopen her credit cards. She closed the accounts, provided her proof, closed on the house and has reopened her credit cards of $40k credit line. Obviously, the underwriter could see she had an issue with credit cards, but the condition she imposed was merely for show to make it look like she had been a responsible underwriter and reduced the risk on the loan. I have helped this person with her budget a year ago when she was drowning in debt and every bite she took was on credit. Just one month ago, she bounced a couple of checks, one of which was for $1000 for her rent! How could she get approved for an $1800 per month mortgage when she doesn't have the money to cover $1000 in rent? I know they looked at her bank statements- I thought they wanted to see that people can manage their money? I know lenders do not look at other things such as utilities, auto insurance and gas etc... which is great for some, but they have approved a loan that will give her $600 a month left per month to pay every monthly expense that does not show up on a credit report. And when her month to month renters finally move out, she will be negative $800 every month until she rents it again. Just as her history shows, her credit cards will absorb her cost of living until she reaches the limit again- then what? I guess with good income, a good credit score, and a 401k of $40k as reserves, you can get a mortgage with FHA up to 55%.

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