Mortgage Pay-off Madness
Posted by Gail | Filed under Credit Wise, Home Buying
Some people are rabid about paying off their mortgages. They turn themselves inside out to double-up their payments or to pay off a whopping amount of their principal each year. Hey, if you can do it and have a life, more power to you. But many people can’t. And so they end up stealing from Peter to pay Paul. Like this chick:
My husband and I are mortgage free, but owe a substantial amount on a line of credit and several credit cards. We can never seem to get ahead and I am wondering if a home equity loan to be used specifically for clearing off all of our debt would be a good idea. Are there any other alternatives for us to consider.
Mortgage free doesn’t mean sweet diddly-squat if you’re walking around with a ton of consumer debt. Yes, wanting to pay off your mortgage is an admirable goal, but not at the expense of your Life, and not if you’re just going to rack up the debt somewhere else.
So today, do a net worth statement and take a snapshot of how you’re doing financially.
Add up what you Own:
- Cash in your chequing/savings account(s)
- Cash in a money market fund, TFSA or government bonds/treasury bills
- Cash in a term deposit or GIC (non-registered)
- Cash value of your insurance policy (not the face-value, which is what the policy would pay out; the cash value, which is what you’ve built up in a permanent life policy, if you have one)
- Assets in your retirement account (including the value of your company pension plan)
- Unregistered assets such as mutual funds, stocks, bonds or anything else you may own
- Current value of your home
- Current value of any other property you owe
- Value of collectibles (Forget about your car, your jewelry or your other stuff. It’s just put on most people’s net worth lists to make them feel less like losers.)
Now add up what you Owe:
- Mortgage(s)
- Car loans
- Lines of credit
- Credit cards (all of them)
- Investment loans (like the RRSP catch-up loan)
- Student loans
- Other loans
- Whatever else you may owe to family and friends
Subtract what you Owe from what you Own. That’s your net worth. You should do a net worth statement at least once a year to measure your overall progress. If the chick from the note above had done one, she’d have seen that her mad dash to mortgage free was coming with some very real costs.
I’m not sure why we think we need to have our mortgage paid off in a nano-second. It’s dumb, particularly if we strap our cash flow so tight that we have no life, or we end up using more expensive forms of credit to get the things we need or want.
Yes, being mortgage free by the time you retire is a great idea because when you’re living on less having your housing costs reduced makes sense. But tying one hand behind your back financially for the sake of becoming mortgage free makes no sense at all.
Unscramble your priorities and make a plan that will improve your net worth instead.
April 23, 2009 at 10:39 am
I have a co-worker who regrets agressively paying down their mortgage. She says her and her husband put every penny they could find into their mortgage but then did not have a life. They didn’t go out at all, they didn’t take a vacation in 12 years, they basically just went to work and stayed home. Now she says she wishes they would have been a little more relaxed about having a mortgage so that they could have had more of a life while they were younger.
April 23, 2009 at 10:43 am
How appropros.
I’ve been beating myself up so much for taking a 5 year fixed mortgage in 2007 at under 5% and not taking a variable rate, thinking that I’m costing my family so much money because of my decision. I’ve looked into breaking it, but the fee to cancel is upwards of $15000 which makes the math questionable at best, and if interest rates rise a half % point it’s a negative action. But I’m forgetting that at least we have no consumer debt, which with one baby and two adults and paying daycare of $1400 a month isn’t too shabby. And 2012 isn’t that far away I suppose; we’ve even increased our payments each week by 20% and barring job loss we should be able to do so again next year even while building a reserve fund and investing in our resp/rrsp stuff. So I guess I’ll stop kicking myself for not being able to see the future. (Well maybe not but I should!)
To answer the poster’s question — consolidating the loan seems like a good idea, but only if you ‘turn the taps off’ on the spending (in other words, was the debt accumulated while paying the mortgage off, or was some of it accumulated even after paying it off?). Make sure you don’t make the classic mistake of paying off a credit card with a loan and then charging it back up, so you get a loan AND a credit card to pay now.
April 23, 2009 at 10:52 am
You are right on Gail!!…I often tell my clients that their mortgage is often the lowest rate of interest they have…why rush to pay that off when they are being strangled by credit cards payments with 19% interest!
April 23, 2009 at 10:59 am
Great advise Gail! Hubby what’s to pay of the mortgage as fast as possible, I’m more laid back and tell him not to worry.
Need some ideas – mortgage is up for renewal – current interest rate is 2.25%, variable, closed mortgage. We are on biweekly accelarated payments. No debt at all, excellent credit.
The banks that I have spoken to so far, are offering prime + 0.80% closed, variable, or prime +1.00% for open, variable. Prime is 2.25% in each case.
I’m not happy with this – because it means that my current interest rate will go up.
Any ideas on negotiating, anything at all will be appriciated.
Thank you!
April 23, 2009 at 11:15 am
I just got a mortgage this year and the urge to pay ahead is big and althought the only other debt I have is a student loan (3.125%) there are more important priorities on my list. I have been rebuilding/increasing my emergency fund and checking account since I bought (and did work) on my house. After I do those two things I would like to create a significant maintenance/home renovation fund (work is always saved up for in advance) and then a car fund. I think the important thing is to create a list of goals and prioritize them. My list includes things like saving money for a plane ticket to visit my sister in Japan. I think right now it is much more important to have an emergency fund before paying down your mortgage. In a bad economy it will give you piece of mind while in a good economy it gives you more options. I will be paying off my mortgage early but I will make sure all of my ducks are in a row first and have a life.
April 23, 2009 at 11:26 am
N, you must remember that you chose to have a variable mortgage. You are taking a gamble on where rates will go. If you think back to just a year ago and what you were paying in interest, Prime + 0.8 isn’t too bad. Maybe you should consider a 5 yr fixed at 4.15%?? Atleast then if rates start to rise, you’ve got a great one for 5 years!! OR, take the variable and remember you do have the option to lock into a 5 yr term at any time with a 1% rate discount. Good luck!
I’m not stressing about paying off my mortgage. I’ll drive myself crazy if I do. I pay bi-weekly on a 20yr amortization. This will help me pay my home off sooner. Sure it would be sweet to not have that debt each month, but the way I look at it, we all need to pay to live somewhere. Even when the mortgage pymt is gone, there are still monthly costs to encure and taxes to pay. Why not find a balance and pay a little extra as you can, and put more into retirement.
Stephanie, sounds like you have all your ducks in a row! Good luck!
April 23, 2009 at 12:02 pm
This was/sort of still is me. We paid off our first mortgage for 150K in 9 years, starting increased pmts and yearly prepayments after the first 5 years in our house. We were mortgage free for a year and then moved which saddled us with a new 230K mortgage. We’ve been in our present house for almost 3 years and have the mortgage (aka “albatross”) paid down to $135000. We are looking at having it paid of in 3-5 years depending on my work situation.
This all sounds great until you see that we ran up $50000 on the line of credit as a consequence of this accelerated paydown. Granted, the LOC is at a lower interest rate than our fixed mortgage, but it was growing instead of shrinking each month.
This past fall, I saw the light – or rather I started watching TDDUP and doing some personal finance reading. I’m using a more balanced approach at debt repayment now – the LOC is shrinking each month and we can still slap extra on the mortgage (just not as much!). Sticking to a budget has also padded our chequing acct and savings plans more quickly. Still working on the emergency fund. It’s gonna take awhile to save up several months of essential expenses!
Heed Gail’s advice. Getting your mortgage paid off sooner is great – just don’t kill yourself and pile up different debt doing it!
April 23, 2009 at 12:46 pm
Question: Does anyone know if it is possible to blend and extend fixed with variable rates?
April 23, 2009 at 12:50 pm
I can relate to this post, I hate my mortgage. I know it doesn’t make the most financial sense but a 15 year debt drives me crazy (I can’t imagine 30 yrs!). I wish I could just leave it, especially since the current interest rate we are paying is 1.35% (thanks to the recent drop in rates). We are 35, have 200k left, and it just drives me nuts!
April 23, 2009 at 1:05 pm
I confess to being a maniac about paying off the mortgage. But I figure that since I don’t have any other debt, my whole “paying off debt” portion of the budget should go towards the mortgage along with the “housing costs” portion.
Admittedly, some people think I live too frugally. But I figure that I don’t NEED to furnish rooms I don’t use (more to dust!) or upgrade toys that work just fine. And the people who tell me this? I restrain myself from pointing out: “That Jag you have is on a huge lease.” and “Your parents just had to give you money to pay the mortgage.”
April 23, 2009 at 1:13 pm
Hey I’m rich!!!!
(too funny)
Really though, my net worth may be positive, but it doesn’t mean I’m swimming in the money. In fact most months feel pretty darned tight, like my jeans after Thanksgiving dinner.
Gail, It’s uncanny how good you are at tapping into my thoughts though. I blogged about this very topic today! I called my mortgage lender, just yesterday, to negotiate a better interest rate. The stupid penalty was MASSIVE so I have to think about whether the PIA factor is worth the savings. (I have 3 years left at the current rate – it’s not terrible but it is about 1.3% higher than the posted rate).
BUT I did get them to increase my payment without penalty by a manageable amount, and — YAY — that tiny difference knocks more that 3 YEARS off the loan! We will be mortgage-free before the kids leave home!
(Note: we have no consumer debt and have 3 month living emergency fund and retirement savings plan that is a priority)
It wasn’t easy! It took a whole lot of prioritizing and ignoring what other people are buying for us to make it happen! We live simply, but we do NOT deprive ourselves of anything important. Good food, quality family time, and a comfortable place to live is our focus — what else is there?
April 23, 2009 at 1:50 pm
Our mortgage is coming up for renewal in June, and we will be looking at a 5 year fixed rate at 3.85% (or lower if it goes down by the end of June when our renewal date kicks in). This rate is through a mortgage broker, and our rate was 4.95% when we renewed 5 years ago. I hate having a large debt like a mortgage, but we will have our mortgage paid off in less than 12 years, and I like that! We will be paying extra on each payment with really helps to lower the amortization, plus we pay accelerated bi-weekly (on my husband’s pay week). We don’t “kill” ourselves trying to pay our mortgage, but it sure is sweet to see that principal going down more all the time! Now, we only have $3,000 left on our LOC and then we are consumer debt free! YAY!
April 23, 2009 at 1:53 pm
“It wasn’t easy! It took a whole lot of prioritizing and ignoring what other people are buying for us to make it happen! We live simply, but we do NOT deprive ourselves of anything important. Good food, quality family time, and a comfortable place to live is our focus — what else is there?”
Pol that is exactly how I feel. We are paying off our mortgage faster than we need to but we have no other debt and we have savings, investments and more money would just mean more “stuff”. Like the rest of life it is about balance.
April 23, 2009 at 2:07 pm
Lynn C: To my understanding you would not be able to blend & extend to a variable. The idea of the B&I is to allow you a rate in between the best & your current rate. This is agreeing to a new 5 yr term at the new blended rate without penalty for breaking yoru current contact.
Hope that helps! : )
Pol & Sally, I agree totally. Buying what you can afford instead of falling into what everyone else has is so much smarter!!
Pol: Way to go on cutting your mortgage costs back!
April 23, 2009 at 2:07 pm
wow! what a great post and great feedback. I am currently a renter so can’t speak to ‘knowing the feeling’ or ‘relating’ to Gail’s post.
What comes to mind with people speak of struggling with their mortgage or being house poor is that they probably bought the house when they wern’t making enough money, or without a large enough deposit, and/or without concrete planning.
I hope to have a lot of money and a solid plan before buying. Unforutnatly, we (my partner and I) won’t be able to buy for 3-5 years, but it’s in our sights and so exciting to plan for.
April 23, 2009 at 2:23 pm
Thanks so much everyone for all the great ideas and thoughts!
April 23, 2009 at 2:30 pm
Lynn C…you cannot blend with a variable rate…
April 23, 2009 at 2:34 pm
N, there is no room for negotiation on the variable rates…BUT, there is room for negotiation on the fixed rates and with the right banker working with you, it is possible for you to end up with an excellent fixed rate…however, the prime rate is projected to stay this low well into 2010 so taking advantage of the variable rate mortgage can be quite beneficial financially…you really should get into an office with your lender and have them show you the different scenarios and potential savings on paper…this is not a conversation you can just quickly deal with on the phone…take the time for a personal visit and you’ll get more out of it..good luck!
April 23, 2009 at 2:37 pm
As usual, Gail hits the nail on the head. Saskatchewan Housing Authority put forward an initiative last year to help lower to middle income families get into homes. You attended a four week course, got your certificate, and the groundwork to get into a home with their help. Qualifiers receive up to 25% of the funds required for a down payment on a modest home, anywhere in the province, with certain stipulations. Part 1 is up to $20, 000, non-repayable if you remain in the home for ten years. Part 2 is up to an additional $30,000, interest and payment free for the first ten years. At the end of the ten years, you roll the ‘loan’, and 10 years accumulated interest into your mortgage and start paying it back. Once you received your certificate you have one year to act on it. My year is up in July. I am in a situation right now that I have to move out of my current suite, because of getting my retriever back (long story, other posts). Because of a 0.5% vacancy rate in this city, I am seriously considering contacting a mortgage broker and seeing if I can qualify for a mortgage, particularly since the government is supplying my down payment. Based on CMHC’s site, I should be able to qualify for a mortgage of $105,000 with my income, allowing me to buy a home in the $140K range, quite reasonable in my city. Mortgage payments would be around $500, which is $250 less than the rent on most houses that you wouldn’t even want to live in!!! The sad part is that I am over 50, and scared to death/excited to take that step. I would utilize the accelerated bi-weekly payment plan, and hope to be mortgage free before the pension cheques start rolling in. This is the first year that I am making headway in my finances, and I am not sure if I am ready for such a step. I am feeling that if I don’t take advantage of this incentive plan, that I will never get into a home of my own, and pay ridiculous rents for the rest of my life. In fact, I have had two potential landlords recommend that I buy instead of rent. Does anyone have any thoughts/suggestions for me? I am desperately seeking …. somewhere to live.
April 23, 2009 at 2:46 pm
Thank Yvonne and Melanie. I have confirmed that there would indeed be an IRD penalty for switching to the variable rate.
April 23, 2009 at 3:39 pm
Jessie–you are already farther ahead than many people are when they get into the house game. Good for you for having a plan! I tend to agree with you that people buy more house than they need at the highest possible amount that the lender tells them they qualify for. I think that pressure of being “maxed out” on the limit tends to increase the anxiety about the mortgage. In turn the only solution seems to be to pay it off faster and the pressure mounts and the cycle repeats. Everytime I think about our mortgage I get the urge to pay it down faster, but then I look at our budget and figure that making life that much tighter wouldn’t help us much.
April 23, 2009 at 4:49 pm
DH and I have a mortgage with ING, which we will be renewing in Aug. 2012. Our rate is 5.79%, fixed, and we have 35 years and 3 months left on the mortgage (we’ve prepaid several thousand dollars already, and I try to add a little bit extra to our mortgage payment every month). We have no other debt, and my FICO score is 810 (not sure what DH’s is, but it’s probably somewhat similar).
Do you think it’s worth calling ING to see if we can get a better rate? What do we say?
April 23, 2009 at 6:40 pm
My husband and I have only had our mortgage as our only debt for years. I grew up with parents who over spent and declared bankruptcy several times. My husband grew up in a very different situation – his family always had money, but his mom was fairly frugal (his dad liked to spend). Lucky for me – he is a bit of a mama’s boy. We knew from the start we were of the same mind set when it came to debt. We are working towards having our mortgage paid off in the next ten years – which will make us 45 when we are completely debt free. Considering my dad and his parents both still have mortgages and are are well past retirement age – I think we are doing pretty good at learning from our parents examples (the good and the bad).
We could probably pay of the mortgage sooner – if we didn’t go on vacations – but I want to live some of life now (my mom passed away at 49) because who knows what the future holds.
Balance is the key – too much sacrifice and you might not live to enjoy being completely debt free.
(I truly believe in being consumer debt free as quickly as possible for everyone – but I would not include mortgage, education, or even necessary car debt as consumer debt.)
April 23, 2009 at 10:05 pm
Yup we’re going to be in that boat.
We were quite agressive with our mortgage, and at the current rate of overpayment we have about 5 years left. But we plan on another child, in’shallah. The daycare again will be 20k the first year. 15k the second year. We just can’t do it, especially since the first time around when I was in maternity leave we had 10k in the bank, and no daycare to pay for . This time we have not enough savings (but no debt), and we’ll have daycare to pay for.
Something’s gonna give, and it will have to be our mortgage. It will take longer, but such is life.. some things are just more important.
On the other hand, I just got a surprise promotion at work!!
April 24, 2009 at 7:13 am
Gale.. i got one for you I make maybe 23k-33k per year depending. I owe 76k. I made only 218k my entire life and i am 37. Ya that amounts to 10k a year. Believe it or not i have never been on welfare other then the welfare i was on when i was going to highschool since I lived on my own going to highschool. And bankruptcy lawyers throw me out of their offices. They think i am lying. They think i do things under the table. I already budget my life, i am a pro at it. My problem is i am poor. Working poor. My 76k comes from student loans while i was attempting pull myself out of poverty.
i suspect you don’t talk to poor people about debt. People like you look at people like me and run away, cuz there is absolutely nothing you can do. I will go so far as challenge you to do anything with what i got. Makes me laugh really.. here is my solution to debt. Try this on for size. Ignore it for 8 years. No one bothers me or calls me. My debt has absolutely no effect on me, want to know why? Cuz i am poor. Honestly all my creditors have no power over me. They don’t even bother trying to come after me.
There is a nice thing in common law, if the creditors give up, then it goes to something known as a statute of limitations. The debt is effectively erased because the creditor has to take interest in the debt or that debt does not exist. I have learned the world of credit sucks anyway. I have credit cards, but they are cards that hold a balance. I even have a credit card from paypal that can be used for imprinting. Most balance holding cards don’t have imprint ability. If I want a car i pay cash. The world of credit is complete rubbish. Debt is an illusion society puts on you. They told me i could make my life better by going to school and they were wrong. School did nothing for me. Now i am in debt for life over it. Apparently society felt that someone who goes to school should be deprived of basic rights to bankruptcy, feels like Oliver Twist to me. Right… whatever, i will live my life and a pretty good life i might add and ignore those people who convinced me to be in debt for life and now hold my debt.
April 24, 2009 at 9:12 am
Davina – it’s worth a phone call to enquire; just don’t be surprised if the penalty is quite high. But also don’t balk at it, you have to do the math (actually get them to do it, it’s what they get paid for) to see if it’s better to pay the penalty now rather than later (in terms of interest). However, I would only consider this if you were moving to a 3 year fixed rate mortgage. If you break your fixed rate and go to a variable and rates go up, you may lose or break even. But if you do the math and on a fixed rate mortgage in three years (currently around 4%) you may do better in the longer run than your current setup.
April 24, 2009 at 3:54 pm
Jason you simply don’t know how to market yourself. Accept it as your weakness and do some serious research on the free internet to find out how to market yourself better and find your niche to improve your pay.
Anyone who has 76k in debt for education that happened 8 years ago must have gone to school for a good 8 years or so, so you definitely should have come up with SOMETHING. I’m really curious what education that was… or, was it, no offence intended, all wasted on parties?
Hey man you gotta come clean with yourself first and foremost.
April 24, 2009 at 3:56 pm
Jason, by the way, you have legal standing to sue the bastards who convinced you to go to school for 8 years.
sigh
April 24, 2009 at 4:33 pm
Jason, your attitude is deplorable. I’m a pretty even keel kind of guy but you wracked up $76K in loans and seemingly have no interest in paying it back which upsets me.
I understand when people get sick and get lots of loans and have to declare bankruptcy, but you made a choice to go for schooling and made a poor choice or perhaps didn’t finish? That isn’t the result of (bad?) people saying ‘go to school’ that’s your personal accountability. I put myself through university and have the calendars to prove it (I apparently worked 40 hours a week in April 1998 as I was writing finals, I don’t remember it was a blur) and can tell you personally it can be done and not just in the 1970s. You and I are likely the same age as well.
What your complaining about is that student loans aren’t discharged by bankrupcy rules. Well that’s a good thing for the average Canadian — who would loan money to a bunch of students if there was no penalty for not paying them back? No students would get any money!
If you have money for a car (in cash) you should have money to pay back your loans.
April 24, 2009 at 4:41 pm
Respectfully who says Bankruptcy is a basic right? How about taking some personal accountability for your choices before blaming society for holding you accountable for your actions. Like the good book says, When you become a man put away childish things (or from Rocky, “You wanna dance, you gotta pay the band.”)
April 24, 2009 at 6:33 pm
Jason – regarding ignoring your creditors – who pays for the stuff you have that you never paid for?
I know some people view going bankrupt as not hurting anyone – but the credit card companies lose the money, the stores the stuff was bought from never get the money and the people working at the places could lose their jobs. If this doesn’t happen then prices go up at the stores and credit card companies increase their interest.
I believe if you don’t pay for the stuff you buy – you end up hurting everyone around you.
April 24, 2009 at 7:22 pm
I have a learning disability and was determined to get an education. Ended up not being able to get a degree because my grades were below standards. The disability also kept them from being able to kick me out for low grades so i just kept going.
April 24, 2009 at 7:30 pm
Ahh but i am one who blames society right.. i should take personal responsibility for believing the university and the government that a person with a learning disability can get post secondary education. I was 19.. what did i know?
I was young and stupid and believed social workers and people that my disability doesn’t mean anything. Haha.. What ever.. it was my fault profs kicked me out of class for not being smart enough. All my fault.. right.. take responsibility .. If i am not responsible for not paying a debt 5 almost 3 times my income. And of course its not society’s fault at all there is no place for disabled people who make an honest living although low income, at least its honest and not welfare which is where most disabled people end up.
April 24, 2009 at 7:45 pm
This to me is typical responses from the “haves” of society to the “have-nots” your all a bunch of hypocritical so and so’s wait until you get a stroke and can’t work anymore and some accountant walks takes off with all your money and your on welfare.. then you tune changes. We all get old there will be a day. I knew a professor who was worth millions.. he had a back injury which disabled him from the waist down. His wife took him for everything he had.. he now lives a very modest life and is dependent in many ways on society to get him through his daily life. Society picks up the tab for peoples misfortune. All of you people need to grow up.
April 24, 2009 at 8:23 pm
Jason
I’m sorry life has dealt you such a crappy hand. But I wonder why you are here–other than to complain, and then condemn everyone who hasn’t had it as hard as you. It’s almost like you want people to respond to you, just so you can cut them down?
I really, truly hope you find a way out of your money issues….perhaps then you can be happier. Or at least less bitter.
April 25, 2009 at 12:26 am
Bitter? Not really that’s you projecting on me. I am not bitter, “haves” see bitter whenever a “have-not” talks about his life. My life is not crappy because i don’t “have”. I think your life is crappy because your obsessed with money and making lenders happy. I didn’t come here to complain. I came to do the same thing you guys have and talk about my money issues. It only becomes complaining when you have come to the conclusion nothing can be done and my life sucks to you. Thus you are projecting this on me. It has nothing to do with me at all. I love my life and have absolutely no problems and i sleep like a baby. I just have unsolvable money problems because society likes to make it hard for people who are the least able to defend themselves. You guys talk about mortgages and blah blah, i will never have a mortgage. i will die without a mortgage or a dime to my name but i am still happy. Happy does not equal money.
I still challenge anyone to see a solution to my money problems that does not involve me getting a better job or making more money and bankruptcy is off the table remember, so is repaying it, since the amount i make a month is less then the minimum payment on my debt and thats if i had absolutely no expenses.
I defy anyone to give me another option other then ignoring the debt and moving on with my life.
April 25, 2009 at 2:43 am
Jason I feel for your situation. Would it be possible to save for a few months and then make one minimum payment every few months?
Good to hear you can sleep without all the stress.
April 25, 2009 at 8:03 am
Unfortunately that would only serve to slow down the debt’s climb, the debt would continue to accumulate more then my ability to pay. So in 10 years my debt would only be 10-20% less large. Not only that each payment is recorded into the credit record, making it harder to erase when the laws change.
My guess is in these hard times they will change the laws and write off the bad student loan debts and start letting people off the hook.
April 25, 2009 at 9:18 am
Jason,
People with learning disabilities can and do get university educations all the time. My brother and my son are prime examples of that. My brother was diagnosed with a learning disability when he was in elementary school. He had to overcome all kinds of hardships, including low self esteem. He went to university graduated, and today he is a 43year old man making a six figure income. My son same situation, he is now going to UBC for biomedical engineering. If you ask me if I thought he would go to university when he was younger, I would have said no for both of them, boy was I wrong! The difference between those who succeed with a disability, and those who don’t is motivation and determination. Nobody can do this for you, you have to want it for yourself. By the way many colleges and universities offer support to those with L.D’s Did you have and IEP, an individual education plan? It’s never to late to turn your life around.
April 25, 2009 at 10:09 am
‘I think your life is crappy because you’re obsessed with money’. Please don’t project on me.
The…tone…of your previous posts gave me the impression you were bitter about things….namely being fed a bill of goods about going to school. Since I’m wrong, I apologize. I do truly hope things regarding your debt load improve. I confess I know little about student loans….is there any way to have the loan reduced? Ioana said something about sueing?
April 25, 2009 at 1:01 pm
Ya every disability is different comparing people is stupid. Just saying saying there is this one exception is just rude. I know one paraplegic that learned to walk again, who went on to be a famous martial artist. His name was Bruce Lee so get out of that god damned wheel chair? right? is that how it works? Golf clap for your brother making six figures.. guess its all my fault right.. ya same old line. Do you think for a moment i have not spent my entire life listening to people say that kind of stuff to me. That its my fault. My fault i am what i am. Lets take this a different way. Let me suggest its not my fault i am the way i am.. nor anyone elses fault. No one is blaming anyone. And lets suggest for a moment things are the way they are. Much the way you might treat someone with a visible or physical disability. Lets not suggest ways i can over come my disability because that’s just insulting and frankly i have been hearing that crap my whole life right down to the special learning teacher in 6th grade i had to tell off.
I wanted help with the money problem. i only mentioned the disability because people were questioning why i am not able to do anything with 5 years of university education. Now please people stop being jerks.
April 25, 2009 at 1:50 pm
jason:
If you don’t want us to make assumptions and generalities about you don’t make them about us.
You want to solve the money problem?
Make more money (work more hours, find another job, etc).
Revisit your budget. Where can you cut back? Find a room-mate etc.
Visit a career counselor. Visit groups intended to help people with learning disabilities because they know about helping you better.
You are making more than minimum wage (or working many hours) so you must be doing something right.
Pick up the towel and decide for yourself.
Stop calling people jerks!
April 25, 2009 at 3:34 pm
Your solutions sound like broken records. Don’t be you. Don’t have a disability, over come it. Make more money, work more hours. Magically stop companies from putting freezes on overtime, change the economy. Magically make all the problems in the world be different if you want to change.
Here i will help you understand what i am looking for. Lets keep your fantasy world of the “haves” out of this. Funny part about the “haves” is there are a number of them that become “have-nots” but you wont see them here. The “haves” jump out windows when the stock market crashes and the “have-nots” are the ones laughing at them. I can live happily on 1000 dollars a month, can you?
Anyway.. here is an example of the help i am looking for.
Oh did you know about this law that can help you… blah blah..
Did you know the government helps you with this….
There is a special program that helps people this way…
there is new regulations laws… special ways of handling..
i know a lawyer who can help you out his name is …
If you do this on form 5a of your taxes you can get this break…
but no all your helpful economic information is for people of high income. low income people got nothing.
April 25, 2009 at 4:18 pm
jason:
I NEVER WROTE “Don’t be you”. Respect is a two way street. Some people try to encourage others by giving example of individual in similar education who found a way to make it work. That is how I read people’s posts. If this approach does not compute with your personality, informing people in a polite fashion is usually more welcome than calling people “jerks”.
You are the very first person to tell me that my life is a fantasy! Your approach of not worrying about your financial obligation (your student loan) sounds like a fantasy-life to me. I am not ashamed of my life or personality. Sh*t happens to every one.
My broken record is based on what I did to pay off my student loan. Despite the road block you mentioned, I pulled through and made it happen. I did NOT jump out of the window when the stock market collapsed. I did sigh…
The questions you put at the end of your last post are very helpful for people to answer your specific questions and it is unfortunate that you did not clarify your needs in your first posting.
Search this website for the benefits for people with disabilities. I do not know whether it applies to learning disabilities, but you might learn from it.
There are resources at many Universities for people with learning disabilities and maybe your alumni can let you use their services. Your high student loan: did you benefit from any disability status when you applied for them? If not, check the rules and find out if they are retroactive (transfer fromloan to bursary…). Did you finish your degree? If so but with more years than expected, maybe the disability status would help you qualify for loan forgiveness etc.
Federal gov’t help:
http://www.servicecanada.gc.ca
Provincial gov’t:
I do not know your home province.
Learning disabilities centre:
I don’t know where you live. A web search should help.
April 25, 2009 at 4:42 pm
So anyway….back to the thread at hand.
We’re very fortunate to have a very low (1.75) variable rate right now–but we also know that we will lose that once we renew, since they don’t offer the prime minus .5% variable mortgage anymore. We studied our finances long and hard, and decided the best course of action was to apply the surplus from our mortgage rate drop to our LOC (6%), and get that paid off asap. Then I will go down to the bank and up our payments by 15%, as well as put a lump sum down. Still keeping enough aside to put to emerg savings, RRSP, school savings, and a little extra for the occasional movie/pizza night. So far, things are balancing nicely…just hope the rates don’t jump back up anytime soon.
April 25, 2009 at 4:57 pm
Jason
Sounds like to me that people are trying to help you.
Glad that you are not stressed out about the loan and that you manage ok with what you have and are quite happy as my quote I always like to have on my fridge says
“Happiness is bigger than any bank account”
Live be happy and love lots.
April 25, 2009 at 8:31 pm
thanks sandy,
Marie no they don’t forgive loans to people who are not on welfare apparently. I asked several times all they do is say i make too much. Apparently someone who makes 21k-30k a year makes too much to be forgiven.
Mellow, gale put student loans on the table. I know its about mortgage, but some of us will never have a mortgage in their life time. We are the poor of the world.. Gale never talks about really poor people. She makes a living off telling you “haves” that if you were smart you would live like a “have not” and be better off for it. Save your money. Did i sum up the whole thing Gale?
All the answers to my questions are $0 except for Student loan. I don’t even know what an RRSP is .. mind you those numbers would be higher if i didn’t spend 20k of the 210k i made in my 20 years of adult life on paying down my student loan for an education i didn’t get. I might even have a house.
April 25, 2009 at 8:41 pm
For Mellow – we are in the process of renewing our mortgage and it is very disappointing. We have a variable mortgage now at 2.25% which ends in June. We are shopping around and the best rate so far offered is 2.90% on variable or 3.95% on a fixed 5 year. No more is prime minus anything being offered. It is all prime plus x%. A very good financial adviser asked us to visit a mortgage broker to see what he can come up with. What the adviser also told us was that Bank of Canada rates are not projected to increase until June 2010 – so to decide if we wanted a variable or fixed mortgage. Well, it is what it is I guess.
Cheers!
April 26, 2009 at 8:10 am
I find it funny that folks are frustrated because they can “only” get a rate as low as 2.90 on a variable or 3.95 on a fixed…lol…it wasn’t that long ago the fixed rates were at least double…no, there is no more prime minus but the rates out there are still very very good…if you are carrying any other debt there is a very good chance your mortgage is still your lowest interest rate…funny how folks will sign up for a buy now pay later plan at a potential of 28%…or a credit card at 19.75% or hit a pay day loan place without batting an eye (and yes, I know there are many people that only have a mortgage as their debt…I am one of them) and then lament the mortgage rates…the rates have dropped considerably…enjoy them while you can…opt for the variable rate and pay down as much of the principal because of it keeping your payments at the maximum comfort level…then if the rate starts to increase you already have a cushion and will still be within your amortization for full discharge…these are the best rates we’ve seen in a very long time…get the best rate you can from your banker but please don’t complain cause it’s still not low enough…they are low and they are excellent…we’ve come along way since 12% mortgage rates (and I have seen them much higher as well in my life time and I’m only 42 years old!)…the Americans thought they found Utopia with sub prime lending rates and you all know how that turned out!
April 26, 2009 at 10:53 am
I have been thinking about this post for a few days, and that is why my comment is late in coming. Generally I agree with Gail and have found this website a great comfort to me since I realized what financial do-do my BF and I have made for ourselves (things are slowly getting better, we’ve implemented Gail’s budget method and it’s only been about 2 months).
I take issue with this one section that says “Value of collectibles (Forget about your car, your jewelry or your other stuff. It’s just put on most people’s net worth lists to make them feel less like LOSERS.) ”
Probably I shouldn’t feel so insulted, but I’m shocked to see in writing that having little net worth makes you a “loser”. Surely the value of a human being isn’t only in their financial savvy or luck? Some of the biggest losers I’ve ever met were very wealthy indeed. And yes, I do mean luck. Some people are only well-off through inheritance or good fortune.
Does anyone agree with me that this is an insulting comment?
April 26, 2009 at 11:08 am
Yes, I found the loser comment harsh. But in the grand scheme of things, decided it’s not worth getting riled up over–since I believe most of Gail’s advice is delivered with the intention of helping, not hurting, us.
April 26, 2009 at 1:57 pm
My mom got the best advise from the bank manager when she went in to withdraw money from her RRSP to pay for dental work. She needed $3000 so would need to withdraw $5000. On that $5k she would pay income taxes plus possibly be subject to clawbacks. My parents own their home with no mortgage so the manager explained to them they would be better to get a secured line of credit on the house at about 2% interest. It is an interest only loan so if she is strapped, she can just pay the interest. And she only needs to use what she needs, not have a full out mortgage.
Susan
April 26, 2009 at 7:31 pm
Jason, you need to just start accepting your situation.
According to you, I’m a “have-not”, with student loan, and yet I manage to pay my student loan every month, and even put more against it. I still save money for a vacation (but make it to somewhere like Cuba, where you can go for $500 for a week), and I live a life that makes me happy.
You don’t have to spend money to be happy – but you do have to accept your life and if something isn’t working, you need to either find a way to make it work, or learn to live with it and accept that fact.
I have to agree with some of the others, that the tone of your comments is insulting.
Regarding student loans, if you’re in Ontario, you can at least apply for Interest Relief (but you can continue to make a payment, so your principle goes down). With the interest relief program, you have to prove your eligibility, but that has the government paying your interest for 6 months, and during that time, any payments you make go straight to principle. Also, you can modify the amount that you pay on your loan to make it less, but so that you can still make a monthly payment. If you don’t make monthly payments, no one is going to assist you to pay it off.
If you want/need something more than that, you can apply for a debt reduction of your loan, up to 3 times, to a maximum amount of $26,000. To be eligible, you have to have been out of school for at least 5 years.
For more info, check out: http://www.canlearn.ca/eng/after/cant/dyd.shtml
While you’re there, you may want to check out the budget calculators, etc.
Since starting work, I’ve been under 30K, and yet I still manage to pay my bills, save my money, etc. At first I was stressed out, until I figured out how I could divide up my money. Once I moved in with someone, that also gave me more money to work with, and I now put around $750 against my loan each month.
All I’m trying to say is that not everyone here is what you would call a “have”. I’m under your definition of a “have not”, and yet I feel that my life is fulfilling and I feel like I have more than enough of everything I need, and then some.
With regards to your comment about programs/laws, etc, that is why people are suggesting you check with a program in your community that assists people with learning disabilities. That would ensure your personal needs are best met with the assistance you require, and information that is relevant to your situation is provided.
However, expecting to come online and barrage people with comments about how no one can possibly understand you, or telling people they are haves and you’re a have not won’t get you any assistance. You need to have an open mind and at least consider the options people are telling you. You are the only person who can solve your problems, not anyone else.
As others have said before, if you can’t make things work as you’re doing them, you will need to make some changes yourself. Challenging us to come up with a solution for you is impossible when you won’t accept personal responsibility.
January 11, 2011 at 8:32 am
But do not worry, you do not have to fall victim. If you are tempted to employ the services of a company offering credit card help, be sure to do your homework. Research the company; try to find former customers to talk to, and make sure that your money will be spent wisely – helping you get out of debt. In far too many cases people who are already in financial trouble find themselves falling in further debt after being scammed by companies who claim to have all the answers to getting out of credit card debt.