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Personal Finances / Credit Cards and Consumer Debt
|Subject: Re: Plans for the New Year||Date: 12/19/2000 7:50 PM|
|Author: SpeleoFool||Number: 51938 of 310986|
Where to start? Next year promises to be exciting. Here's just some of what we plan to do:
* revise and update my Excel budget for 2001
* open discount brokerage account(s) for my wife and me; fully fund year 2000 Roth IRAs before Tax Day
* pay off my $11k Citibank balance before the 2.9% rate expires in June
* increase our cash reserves; set up a smarter savings vehicle (MMA? CD ladders? Online banking?)
* get rid of escrow; start a "personal escrow" account
* continue to make maximum contributions to our 401ks and my Stock Purchase Plan
* open discount brokerage account(s) for after-tax investments
* develop a regular exercise routine
* spend more time outdoors
...And then things get a little more hazy. Because one other thing I'd really like to do is:
* get rid of PMI
The reason things are hazy is that I'm not sure how close we are to reaching 20% equity. As of today, we owe $155,361.01 on our mortgage. If our house is appraised at $194,201.25 or more, we're there. We received an advertisement from a local real estate agent that shows a house in our neighborhood with the same floorplan as ours and comparable features listed at $199,000. So, I think we're pretty close, if not already there.
Here's the kicker: in order to drop PMI, I need to spend $350 to have an appraisal done by someone approved/assigned by my mortgage company. If that appraisal comes up short for any reason, I'm SOL. Even if I send in a check for the difference that same day, they'll require a second appraisal (at another $350--ugh). I'd be grateful for any thoughts or advice from Fools who have been through this mess before or are familiar with how PMI works.
Anyway, if all goes well with an appraisal, we can drop PMI, and:
* pay off second Citibank card (3.9% for life) around August, give or take; celebrate DEBT FREEDOM, except for mortgage
If we fall short of 20% equity, one thought I had was:
* transfer part of my mortgage to credit cards
Crazy, huh? Then again, PMI is basically wasted money anyway. I probably won't need a very good rate to lose less than $100/mo. to interest, depending on how much I need to transfer. Our "3.9%-for-life" card just increased our credit limit by $3k, and my Citibank Visa has offered me 6.9% for a year or 7.9% for life. My mortgage company told me they'd drop PMI (without an appraisal) when my balance reaches $136,000.
I don't really want to carry around another $20k on cards, and I don't want to waste $700 on two appraisals. Thoughts? Suggestions? Foolishness?
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