Comments on: Refinance or Not? (Your Advice) – Why Losing Money Hurts – Mom’s Work Is Worth $138K

By: dan

dan — Fri, 04 May 2007 03:50:34 +0000

Is a refinance really necessary? Can you take out a line of credit instead? This may be a better option than refinancing for a long period. I just wanted to mention that there are other choices that you may not have thought about.

By: Teri Newton

Teri Newton — Fri, 04 May 2007 02:04:06 +0000

IRS charges interest and penalties – so interest is about 14% (8% interest plus 6% annually for penalties). For now, with interest rates rising… They may rise their interest rates as well – they change them quarterly. Just wanted to point this out.

By: Jim

Jim — Thu, 03 May 2007 20:52:00 +0000

The first sentence of my last post has an error – should read :
“…better Guy, by PAYING OFF the IRS payplan, you take the risk out of the equation…”

By: Jim

Jim — Thu, 03 May 2007 19:23:07 +0000

While the numbers work better Guy, by using the IRS payplan, you take the risk out of the equation by removing the IRS influence over your life.

If the husband loses his job, gets injured, gets demoted, etc., the IRS won’t be a concern because they are paid off.

Otherwise, when the IRS payment can’t be made, the IRS goombas are back in your life again.

If an emergency occurred, I’d much rather be dealing with Chase/Fifth Third/Bank of America/etc. than with the IRS.

Jim

By: Guy

Guy — Thu, 03 May 2007 18:40:40 +0000

If you have a payment plan with the IRS and they aren’t charging interest, then economically it doesn’t make sense to take out a loan incurring interest to pay a loan that doesn’t. Being able to deduct some of the interest in a mortgage isn’t as good as not owing interest at all.

By: Jim

Jim — Thu, 03 May 2007 12:53:47 +0000

This isn’t an either-or situation. You can also get a 15, 20, or 25 year mortgage.

I would strongly advise you to refinance the IRS, the 1st mtg, and the 2nd mtg into one 15 or 20 year mortgage. This pays the debts off quickly and give you some wiggle room.

Other than the Mafia, the IRS is the worst entity to owe money to. They have almost limitless powers to reposess, foreclose, garnish, etc. Do whatever it takes to get them off your back.

If EVERYTHING is in one payment, that gives you some extra cash to start saving for retirement. As it stands now, your husband might have to continue working longer than planned simply because there are no retirement funds available for him.

Two other suggestions for you: can YOU work too and have you considered moving into a cheaper home? Can you imagine what you could do if your mortgage payment was half of what it is today? If you worked a minimum-wage job (these are unusual in most parts of the country), you could pay off the IRS in a year. Combine that with moving, and your husband might be able to retire early!

Good luck,

Jim

By: Joey

Joey — Thu, 03 May 2007 09:36:03 +0000

Umm, are you assuming that will be living in the house for the next 30 years. I realize it may just be me but I just could not for the life of me live in the same place for 30 years. And if it gets the IRS of your back plus gets all of your other finances taken care of. As long as the rates are good you will wind up with a payment less then the total amount of money you are shelling out each month.

By: Credit Cards Advice

Credit Cards Advice — Thu, 03 May 2007 09:08:05 +0000

The first thing that entered my mind was the comment:

My question is do I refinance my home loan for 30 years? The finance rate is not known at this time.

Before you can make the right decision, you absolutely must know all the factors and not knowing your rate on a refi loan, you simply cannot make an informed decision.

Get your numbers nailed down, talk to your bank and seek an independant financial counsellor before making any final decisions.