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Money Matters
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Old 05-26-2010, 09:48 AM   #21
BimmerFerret
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Yes I do.

I worked for a big bank chain and this is what branches care about :

1.) Business / SBA Loan Sales
2.) Getting the application for credit cards - Approval does not matter
3.) Personal Loans

When I worked at the chain, these were drilled into our heads. Sell, sell, sell credit. It wasn't about the fluffy ads you see on billboards.

While I'm sure "helping the customer" was somewhere down on the list, but the reason lending is such a huge industry is because it is big bucks for banks and other lending companies. Look at any P&L of a bank and they get big revenues from lending and overdraft fees.

I don't see the need for lending in a personal situation except in a few situations:

1.) Mortgage - Which you DO NOT need credit. My fiance had zero credit score and was approved. She showed proof of making $$$ and that was enough.
2.) Selling a car you are upside down on - This would require some credit history; however, if you follow Dave's methodology, you should be driving a paid off beater (like I did with my $700 Honda). I'm sure you have approved notes for the difference of a car in lieu of a sale.
3.) Avoiding Bankruptcy

We have two different idealogies and that is fine. I'm not interested borrowing money and pay interest to build a number, so that later I could maybe borrow money. My credit score will slowly fade to zero over time. If it doesn't ever go to zero, that is fine. I won't be utilizing it, so I don't really care. I will just check it routinely for fraud / ID theft. Just my $0.02.

Instead of borrowing money on my next car to build my FICO score. I'll pay the payment to myself in the form of Roth IRAs...

Thanks for your comments.

John
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Class of '03, yet you're still an idiot. Whats your point? Do you really think that you're somehow a god because you joined a site before someone else? ****ing nerd.
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Old 05-26-2010, 11:52 AM   #22
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Originally Posted by 330CiJohn View Post
Yes I do.

I worked for a big bank chain and this is what branches care about :

1.) Business / SBA Loan Sales
2.) Getting the application for credit cards - Approval does not matter
3.) Personal Loans

When I worked at the chain, these were drilled into our heads. Sell, sell, sell credit. It wasn't about the fluffy ads you see on billboards.

While I'm sure "helping the customer" was somewhere down on the list, but the reason lending is such a huge industry is because it is big bucks for banks and other lending companies. Look at any P&L of a bank and they get big revenues from lending and overdraft fees.

I don't see the need for lending in a personal situation except in a few situations:

1.) Mortgage - Which you DO NOT need credit. My fiance had zero credit score and was approved. She showed proof of making $$$ and that was enough.
2.) Selling a car you are upside down on - This would require some credit history; however, if you follow Dave's methodology, you should be driving a paid off beater (like I did with my $700 Honda). I'm sure you have approved notes for the difference of a car in lieu of a sale.
3.) Avoiding Bankruptcy

We have two different idealogies and that is fine. I'm not interested borrowing money and pay interest to build a number, so that later I could maybe borrow money. My credit score will slowly fade to zero over time. If it doesn't ever go to zero, that is fine. I won't be utilizing it, so I don't really care. I will just check it routinely for fraud / ID theft. Just my $0.02.

Instead of borrowing money on my next car to build my FICO score. I'll pay the payment to myself in the form of Roth IRAs...

Thanks for your comments.

John
What makes you think your score will just fade to zero. If it's at 700 for example, and you don't do anything to negatively affect it it's not going to move. Why would your score be penalized for doing what's right?

I wasnt telling you to borrow money just to raise your score. I'm just saying if you already have a good score and don't do anything wrong it still wont go to zero.

Also, no one would be approved with a zero score. I don't even think you can get a zero score. There's a big difference between not having credit and having a very low score. She was probably the former.

Last edited by DylloS; 05-26-2010 at 11:56 AM.
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Old 05-26-2010, 04:35 PM   #23
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Quote:
Originally Posted by DylloS View Post
What makes you think your score will just fade to zero. If it's at 700 for example, and you don't do anything to negatively affect it it's not going to move. Why would your score be penalized for doing what's right?

I wasnt telling you to borrow money just to raise your score. I'm just saying if you already have a good score and don't do anything wrong it still wont go to zero.

Also, no one would be approved with a zero score. I don't even think you can get a zero score. There's a big difference between not having credit and having a very low score. She was probably the former.
I was always told if you don't utilize it, it starts to go down after several years. If this is false, then I stand corrected.
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Class of '03, yet you're still an idiot. Whats your point? Do you really think that you're somehow a god because you joined a site before someone else? ****ing nerd.
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Old 05-27-2010, 12:08 PM   #24
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I was always told if you don't utilize it, it starts to go down after several years. If this is false, then I stand corrected.
Yea a little bit but imo it's a lot easier to take out a cc and buy some gas and immediately pay it off just to avoid this.
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Old 05-27-2010, 12:28 PM   #25
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It also matters if you are closing those lines of credit as they are paid off. For instance, if you cancel all your credit cards after they are paid, that will lower your available credit, and thus, your credit score. That's my understanding. If you leave them open, your credit will still be available.
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Old 05-28-2010, 10:53 AM   #26
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It also matters if you are closing those lines of credit as they are paid off. For instance, if you cancel all your credit cards after they are paid, that will lower your available credit, and thus, your credit score. That's my understanding. If you leave them open, your credit will still be available.
You're right. It kills the score to close the cards because it's lost available credit and history.
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Old 06-21-2010, 11:09 AM   #27
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Well life just threw in a big wrench. We (my future wife and I) have decided we want to bail on Kentucky and move to Florida (Bradenton/Sarasota/St. Petersburg area). Believe it or not, this move would cause us to move into a smaller place with a nearly 50%-to-60% smaller mortgage. Right now we owe $169k on the house, so it would go down to $70k-$80k in Florida. So we would shed a lot of "house debt" and assuming we could make the same income and the mortgage would be much smaller.

Currently we owe about $7k exactly on the Red Line still, and $2k in student loans. So if we end up needing to bring up funds to the close table (assuming we get really serious), I may sell the E46 and pick up a 92+ hatchback Civic. The funds from E46 sale would make a good down payment on a $70k mortgage. Stay tuned...
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Class of '03, yet you're still an idiot. Whats your point? Do you really think that you're somehow a god because you joined a site before someone else? ****ing nerd.
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Old 06-22-2010, 04:50 PM   #28
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^ Best of luck with everything. Those are tough choices to make, but if you can make it through a few years without stuff that you want (or at least that other people want) you'll be a lot better off for it. I'm trying to figure out a few things myself with housing, cars, etc. It is tough because we just had our first kiddo, so that requires a lot of changes on its own.
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Old 06-23-2010, 09:54 AM   #29
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^ Best of luck with everything. Those are tough choices to make, but if you can make it through a few years without stuff that you want (or at least that other people want) you'll be a lot better off for it. I'm trying to figure out a few things myself with housing, cars, etc. It is tough because we just had our first kiddo, so that requires a lot of changes on its own.
I agree and thanks man. We live in an 1800 sq ft house and probably utilize 1200 sq ft or so. I pay a VERY high (for Kentucky at least) mortgage of nearly $1,600/month. Property taxes keep going up even though the value has gone down (seriously WTF? ). We found a place in Bradenton last night for about $75k and a 15/year mortgage at 5.0% with P&I, PMI, and taxes the estimated payment was $515/month. Even if you add a bunch on insurance on top of that it still is very low. Wow.

I just couldn't imagine the freedom I'd have in my career if I could pay my mortgage in small fraction of only my paycheck!!! We could easily save up to do a lot of things we have wanted to do with that kind of flexibility!!

As for your situation, you are in a much more sensitive pickle than I am since you have a kid now. You seem like a well informed guy, so I'm sure you 3 will be just fine.
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Class of '03, yet you're still an idiot. Whats your point? Do you really think that you're somehow a god because you joined a site before someone else? ****ing nerd.
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Old 07-04-2010, 06:10 AM   #30
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again.

Just put down another $3,000 on the Saturn and another monthly payment is coming up. We will probably owe $7,200 on the car by the time the dust settles this month. I'll tell you, the insurance on these cars is a PITA (I'll be married in August so that should drop it quite a bit). I got tempted by an awesome deal on a locally sold E46 M3 convertible...but I stood my ground (phew).

It kind of sucks writing such huge checks (or in my case, ACH'ing the money), but reaching the end of the tunnel will be worth it.

15-year mortgage is also paying off in huge dividends. We've already paid down enough principal in base payments to make the re-fi worth it.
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Old 07-07-2010, 10:27 AM   #31
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I'm in the midst of a refi at 4.75% fixed, no closing costs I'll be saving $140 / month with no money out of pocket.
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Old 07-07-2010, 10:39 AM   #32
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Awesome man! Interest rates are absolutely insane right now! It definitely is a buyer's market.

I'm still wanting to move to FL, but I am starting to realize I owe too much on my house to sell it. So in the meantime I think I will begin to look for new employment. I need to make more money to offset my debt/income ratio and my small business I tried starting isn't working out. I know part of it is my fault, but I just don't want to throw more money into it when basic marketing won't pick me up a few customers Luckily I have no debt in the business and I can use the equipment in my personal life, so the cost isn't completely wasted.
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Class of '03, yet you're still an idiot. Whats your point? Do you really think that you're somehow a god because you joined a site before someone else? ****ing nerd.

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Old 07-07-2010, 11:15 AM   #33
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I'm in the midst of a refi at 4.75% fixed, no closing costs I'll be saving $140 / month with no money out of pocket.
I just closed on my house last week. I locked in 3.75% for 5 years.
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Old 07-07-2010, 12:03 PM   #34
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I just closed on my house last week. I locked in 3.75% for 5 years.
ARM loan?
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Old 07-07-2010, 12:21 PM   #35
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ARM loan?
Yep. This is where everyone freaks out
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Old 07-07-2010, 12:22 PM   #36
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If rates keep dropping I might refinance soon to a 30 year.
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Old 07-07-2010, 12:26 PM   #37
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If rates keep dropping I might refinance soon to a 30 year.
They are at historic lows right now. I had the option to pay $500-700 to drop my 30yr as low as 4.25%. A 15yr fixed would have been 4%. I can't imagine it is going to get much lower, so I locked in. Everyone has a different approach though.
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Old 07-13-2010, 12:44 AM   #38
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My rental is at 6.375% and I want to refi with minimal closing costs, any advice. Income is great with 10% to TSP, max to ROTH, and 50% pension upon retirement in 5 years at 40. The neighbrhood with the rental is doing great and I look to sale before I retire.
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Old 07-13-2010, 01:00 PM   #39
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My bank flat out offered no closing costs. Call around and I'm sure you'll get someone offering the same.
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Old 07-14-2010, 01:17 AM   #40
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Thanks, will do.
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