What a bunch of crap

[400/6/PAC]

I'll try to make this short.
I found out that I owe 4,000 in taxes this year.
I have the money in the bank to pay them but thought I will get a bank loan so I can have a year or so to pay it off.
Went to my bank, applied for a loan of 4,000. The loan officer said if you borrow 4,000 the interest will be 12.99% but if you borrow 5,000 it will drop to 8-1/4%.
So I said lets do 5,000.
The next day I got a call and they told me I was approved for the home equity line of credit that I applied for.
I told them I didn't apply for a home equity line of credit, I applied for a personal loan.
So I go back to the bank and talk to the person that handling my lone, She said that she went ahead and applied for me.
Heres the FU$%&^ed up part.
The loan I applied for At 8-14% jumped to 20.99%. With a score of 714 and no late pays or collections.
She said lets go ahead and do the personal loan and then you can pay that off with your home equity line of credit.
I think they are just trying to push me into a home equity line of credit.
Dose this sound messed up to you guy's.

[Spike]

Tell them you'll get a loan somewhere else. They'll straighten things out in a hurry.

[Shakey]

Tell them you'll get a loan somewhere else. They'll straighten things out in a hurry.

I actually enjoy negotiating with financial institutions.   

[Bandit4142]

That's bullshit.   With your credit score, and payment history, you should qualify for something considerably more reasonable.   And the fact that they are pushing a HELOC is utterly ridiculous.   I'd look elsewhere for financing.

[red72chrgr]

Like he said, go somewhere else. We were having new windows put in our house, the loan co. tried sneaking a second mortgage on us at 14 3/4 percent. Guess you know the rest.

[400/6/PAC]

I'm supposed to go sign the papers tomarrow.
It aint gonna happen.
I remember when bank transactions were on the up and up.
Now they prey on unsuspecting people.

[dads_69]

Its a case of they have the cash and you don't. Welcome to the real world.
Looks somewhere else vs your bank like everyone has stated. Newbies........
Also, hes not making a lot of sense either, has the cash but doesn't want to use IT? What a screw ball. And being a newbie, and asking our opinion about what should HE do? Its almost like him asking, should I or shouldn't I jump off a bridge cause someone asked him to.

[Neal_J]

You say you have the money in the bank, so use it.   

Why take out an 8% loan if you're probably earning 4% at best on your savings?

Oh and get someone better to do your taxes so you don't get a 4 grand facial. 

No charge for the free advise...

Neal J, CPA

[TK73]

Is anybody else here getting the fact that he HAS the money but wants to pay a bank a MINIMUM of $412.50  ($5000 x .0825) for a loan over the next year to pay the taxes??

Am I missing something here??

[PocketThunder]

Is anybody else here getting the fact that he HAS the money but wants to pay a bank a MINIMUM of $412.50  ($5000 x .0825) for a loan over the next year to pay the taxes??

Am I missing something here??

thats the way i read it.   

[Mike DC]

   
For 21%, I could put you in touch with a shark named Vinnie.


Seriously, let the bank know that you're not gonna be doing business with them for anything other than a straight-up $4-5K loan.  Tell them that your home equity is not part of the conversation (except maybe for use as collateral).  The bank may take it or leave it, but either way your credit history shouldn't have them bending you over like this.  Shop around and you'll probably do a lot better.

 

[Silver R/T]

find another loan officer. When we were buying house we had a loan officer that checked my mom's credit score and said she DIDNT have any WTF huh. So we found another loan lady and she said mom has perfect credit and we got 5.8% rate on mortgage.
Personally Id just pay them off 4 grand and be done with it.

[NHCharger]

One of the women in our office use to be a branch manager for one of the larger banks in our area. I've heard many  horror stories about all the hidden fees, bait and switch tactics with interest rates and loans, preying on people with poor credit, racial profiling, etc. They make used car dealers look honest.
I would definitely go elsewhere and pull any accounts I have at that bank.

Also if it was me, I would just pay the IRS bill if I had the money on hand, and borrow some money later if I needed it.
Why pay interest on a loan when you have the money to pay it in the bank? It's not like the interest you earn on that bank money is more than the interst you pay on the money you borrowed.

***Edit** OK, 5 guys were thinking the same thing while I typed out my reply I've got to type faster.

[Old Moparz]

One reason a bank will want a home equity loan over a different type, is that they will automatically have dibs on your home if you default on it. Yes, other type of loans could eventually put a lien on it, but the loan tied to your house makes it easier for them to force a sale much quicker so they can get paid.

Personally, I would pay outright for what you're trying to get & skip the loan, but you have your reasons I suppose.

[Old Moparz]

***Edit** OK, 5 guys were thinking the same thing while I typed out my reply I've got to type faster.

Yeah.   

[400/6/PAC]

Dads 69
Your the kind of asshole that runs us newbieessss off this site.
I was only asking what you guy's thought about the bank tactics.
Did you happen to notice that most of the other guy's actually had something positive to say, exsept you ofcourse.
Why dont you go drink another beer.

[400/6/PAC]

I do have the money to pay the taxes but it would would leave me very short on cash.
Thats the reason for the loan.
I didn't mean for this thread to become a topic about my financial statis, I wanted to ask about banking tactics.

[Neal_J]

Well, gee, I guess you're fishing for a "banks suck" response so here you go:  banks suck!

Unfortunately, and with all due respect, the bank staff may have pegged you as not the sharpest knife in the drawer.  Consider the following from the Bank's perspective:

(1) You have a *suprising* tax bill of $4000 (Bank:  Hmmm, he's not financially savvy or very tax-smart.)

(2) You're willing to pay interest on borrowed funds despite having the cash (Bank:  Hmm, he's willing to incur unecessary interest payments.)

(3) You take a loan in excess of your needs: $5,000 vs. $4,000 (Bank:  Hmmm, he's easily manipulated and thinks nothing of the additional interest on the extra 25% of increased loan balance.)

(4) You decline a home equity line in favor of a personal loan (Bank:   Hmmm, he's willing to take a non-deductible loan rather than a likely deductible equity line or equity loan - once again not tax-smart.)

With four strikes against you, do you really think it's the bank's fault they tried to gouge you on the rate??   That, I believe, was exactly Mark's (Dads) point above.   

Whatever.  Yea, right, amigo, it's not you.  Banks suck!!

Neal, CPA
(yes, really)

[Steve P.]

For what ever reason you want to barrow money is no skin off any of our backs. As far as banks go, I have found over the years, that Credit Unions tend to have better rates and will do a better job of getting you into what you can afford. This is from my experience. I speak for no one else.. 

[Rocky]

 

[dads_69]

Dads 69
Your the kind of asshole that runs us newbieessss off this site.
I was only asking what you guy's thought about the bank tactics.
Did you happen to notice that most of the other guy's actually had something positive to say, exsept you ofcourse.
Why dont you go drink another beer.

Read what Neal J wrote to you. Thank you also Neal J. Yes, that was my point, I didn't think I would have to spell it out for him, I thought I was being savy, an calling me an asshole, dude, is that the best you can come up with? Go ahead, get your loan for 5 grand and screw yourself, thats the best advice I can give you since your not reading between the lines anyways. By the way jackass, I don't drink either, I just call them as I see them......Cry baby.........
Mark

[400/6/PAC]

Its a case of they have the cash and you don't. Welcome to the real world.
Looks somewhere else vs your bank like everyone has stated. Newbies........
Also, hes not making a lot of sense either, has the cash but doesn't want to use IT? What a screw ball. And being a newbie, and asking our opinion about what should HE do? Its almost like him asking, should I or shouldn't I jump off a bridge cause someone asked him to.

You call me a Screw ball newbie and wonder why I called you an asshole??
It's not the IRS that I owe, it's property taxes.
I am a first time home owner and my mortage company takes out escrow to pay the taxes.
Because I'm not  the sharpest knive in the drawer, I didn't realize that the escrow would cover taxes for the second year I am in my home but the first year was up to me.
I wasn't prepaired for that.
Dads69 sorry I called you that.

[Paul G]

If you have the cash in the bank use it. Pay your taxes with it. If you are willing to make the payments on a $4000 loan amortized over one year make those payments back to yourself. In one year you will have your money back plus interest.

Start shopping for a HELOC right now. You can find deals out there that will open a HELOC with no closing costs and sometimes without any fees at all. Use that as your emergency back up funds if the need should ever arise.

Yes banks suck! Savvy consumers rule!

[mikepmcs]

I'm with Steve P on this one,  try to find a credit union to join..  They have better rates and programs normally. I personally would not get a HELOC but a straight forward equity loan if you have built up enough to do so.
It sounds like your mortgage company kind of screwed you on the escrow monthly bit for you to have to cover the Property taxes.  None of my business but wondering what mortgage company you have, was it a broker you went through or a bank.....(just questions in my head)
No matter, I would prefer the equity over the personal loan due to the fact you can claim the interest paid on your taxes, i don't believe that is the case on line of credit loans all the time.  You can't claim it on a personal loan.

Next thing I would do after figuring out your loan situation is refinance your mortgage with another institution. Once again, find a credit union please.  You'll be much happier.

If you have any family military connections, get in to Navy Federal, Pentagon Federal, etc..... if you can.

Even USAA is a great banking institution. Do they do mortgages, I'll have to check.

I'm still confused on why your mortgage company dorked you on the escrow to cover taxes, that should have been included, or rolled in to the original loan if nothing else.
That alone would cause me to seek another financial institution that is taking more of an interest in my situation then just putting another notch in their post.

good luck, you'll get it sorted

v/r
Mike

[mikepmcs]

https://www.usaa.com/inet/ent_utils/McStaticPages?key=become_member_main

looks like parents have to be usaa members or military but here's the link to USAA.

There should be local credit unions around you as well though.

v/r
Mike

[400/6/PAC]

Lot of good advise, Thanks
I use citi mortage.
I financed in april of last year, so they said that since I hadn't paid in a full year of escrow ( think they go january to january )
That the first year was up to me.
Another thing is that the north texas tollway is going to take the front 1.55 acers of my land to build a new toll road.
When they decided to do that, they split my property taxas.
I received two county tax bills and two school district tax bills, all under one address.
I just didn't know the taxas owed was going to be this high.
After talking to the mortgage company I found out they misscalcuated the amount I would owe, they wernt aware of there being two tax bills at a single address.
I was going by what they said my estimated taxes would be.

[mikepmcs]

Also, i find it strange that they just wouldn't up your mortgage payment for a year to cover it without taking a loan, it would be much cheaper and interest free(kind of anyway)
I would look in to that as well.

example for me.  2 years ago mortgage  $850ish, excess escrow that year, they sent me a check.  lowered my mortgage automatically last year to $795 to try to even it out.  taxes were higher so my escrow didn't cover it.  got a letter from the pentagon FCU and my mortgage just went up to $840ish for this year once again to try to even things up.  So it was taken care of on their end with adjustments and no immediate outlay at my expense, just over the next year in increased mortgage payment.  does that make sense.  check in to it if not already, maybe that is an option as well or over a couple of years to make up the $4000.

v/r
Mike

[Steve P.]

Yup, Mike is right on the ball..

I have owned 4 homes and all of them where bought at a good time for me, but,,, not for taxes. Also in Florida to get the HOMESTEAD EXEMPTION you must live in the house for a full year BEFORE the tax season begins. This house went 22 months.  I paid the taxes up front so that I wasn't going to have to pay for them over my 15 year mortgage. Though you can roll your taxes into most all mortgages I don't recommend it. It will just cost you more in the long run. A good rule of thumb is anything you can pay up front, DO... It will save you in the long run.

Another thing that works quite well is to pay extra money every month on your mortgage. Most times you have to set this up with the mortgage holder and some require a separate payment to do so, but it will shorten the life of your mortgage and in turn save you thousands. Also this will increase your credit number and that normally means lower interest rates and more choices in loan institutions.

Hope this helps..

[400/6/PAC]

Yea that dose help
Thanks
I just got off the phone with my cpa
After reading the letter to him That I got in the mail,he said what they telling me was that the escrow I paid in 06 was not enough to cover the taxas,so they were going to applie that money and it was up to me to cover the rest.He said if they didn't do that then they would have to mail me a refund for money paid in 06.
This will cover more then half of what I owe. Thank Goodness.
I learned a lot though, thanks for your input.
Now I can pay the rest and not worry about a loan.

[mikepmcs]

Sweet!

[Steve P.]

Very good news bro. Think about making those extra payments as well. It doesn't have to be a ton of money every month. $50.00 will make a noticeable difference. The more the better.. Some of the on line bank calculators have the extra payment line added in. Just try a few figures in there and see how much time and money you can save..

Good luck, Steve

[400/6/PAC]

Yea thats a load off my shoulders.
I'll tell you what though, some of these guy's are right, I am stupid.
Here I am paying money each month into an account that I dont know anything about. had no clue that I would get a refund for money not used for taxas.
Didn't know that the mortgage company couldn't pay them if there wasn't enough in the account as the tax collectors wont accept parcial payments without prior arrangments.
never thought to varify the actual amount I would owe at the end of the year.
I could go on but you get the idea.
Lessons learned
Thanks

[Steve P.]

Yea thats a load off my shoulders.
I'll tell you what though, some of these guy's are right, I am stupid.
Here I am paying money each month into an account that I don't know anything about. had no clue that I would get a refund for money not used for tax's.
Didn't know that the mortgage company couldn't pay them if there wasn't enough in the account as the tax collectors wont accept partial payments without prior arrangements.
never thought to verify the actual amount I would owe at the end of the year.
I could go on but you get the idea.
Lessons learned
Thanks

It normally only takes one lesson like this.. 

[mikepmcs]

That is why this place is so great.  We've all been in unchartered waters at some point and we learn by life lesson or by other's experience.  Thank goodness, there is such a range of age and experience on this site because everyone can benefit at some point no matter what the question, be it cars or otherwise.

The knowledge I receive at times is absolutely priceless!!!

You surely aren't stupid as you say. Case in point, you own your own home.  You must have done something right to get there!  Don't be so hard on yourself.

I'm just glad it is sorted out for the most part.

v/r
Mike

[Neal_J]

I'll tell you what though, some of these guy's are right, I am stupid.

On the contrary, stupid people don't admit their mistakes.

Rock On

Neal

[Rocky]

Very good news bro. Think about making those extra payments as well. It doesn't have to be a ton of money every month. $50.00 will make a noticeable difference. The more the better.. Some of the on line bank calculators have the extra payment line added in. Just try a few figures in there and see how much time and money you can save..

Good luck, Steve

This is where I disagree with you Steve.  If someone were to invest that extra $50 a month in the stock market that averages over 11% a year, instead of applying it toward your 6% mortgage where the interest is tax deductable anyway they would be much better off in the long run.  Of course this only applies if you make the absurd conclusion that most people are disciplined enough not to touch the money and stick with the program.
     
      Rocky

[400/6/PAC]

There is a lot that can be learned from all of you. Thanks
I have a cpa that I use, he just dose my income tax, he said I should think about consulting a financial advisor.

[charge-it]

Pay what you owe with your own money then make payments to yourself every month. Your taxes will be paid and if you charge yourself 3% you`ll have more money in your savings in the end. Now that`s a no brainer...

[400/6/PAC]

That makes a lot of since, use the money you have then pay yourself back.
My problem was if I had used the money I had I would have been broke.
That was whole reason I looked into a loan.
I just didn't want to deplete my intire savings.
It's good that it worked out like it did, Man did I learn some stuff or what.

OH I can't resist,
charge-it
GET IT
charge-it
LOL
Don't be mad you gotta admit thats funny.

[mikepmcs]

I subscribe to that plan myself!

[dodgecharger-fan]

The best return on investment (in almost all cases) is to pay down your debt....

Interest that you earn by keeping it in the bank is negliible compared to what the bank would charge on a loan.

So, all else being equal, you'd have to dip into your reserve to make up the difference....

Sure, there are other ways to invest your money that'll give you a bigger return - but with more risk.
Even the safer, high-yield investments don't fit into your line of thinking... because they usually lock you in and that would leave you 'broke' in terms of cash flow.

Go with what's been suggested - pay out the debt and then pay yourself.

It can be difficult to stick to the plan, but there are ways...
I found it a lot easier if it comes off your pay cheque and you never really see it.

I get that effect with my company's stock purchase plan as well as our capital accrual (retirement) plan.
Most of the retirement plan goes into registered savings - but we've got a threshold where anything after a certain amount goes into an After Tax Savings Plan - a bank account. Not registered. No penalty to withdraw. No tax hit.
I look at tate once in a while - I usuallly smile. It's like finding a twenty in an old jacket - only a LOT better.
I keep an eye on the company stocks, though.. 

If that's not an option, I use another method where I have an automatic transfer set up for the same day that my pay goes into my account. It transfers X dollars into another savings account and X dollars into the RESP (college fund) I have set up for my daughter..

That money is mine, but it's like I never had it. So, I don't feel the urge to spend it. I make due with what's left and dip into the savings account for big things or emergencies.

I also take advantage of deferred payments at retail stores - but ONLY if I know I can pay them out before they come due. At 29% interest, they are the nastiest debt to take on... pay them out before they're due and interest is zero. At most, you pay an administration fee - but I've even negotiated that down to zero.

I can totally relate to this:

OH I can't resist,
charge-it
GET IT
charge-it

A neat plan I learned about credit card debt - if you have more than one:
(actually this works for any open debt where you can pay it down as much as you want without penalty)

List them in order of most expensive to least expensive - That's in terms of the interest rate charged - not in terms of your balances.
Most people pay a little bit more than the minimum payment so that they feel they're getting ahead. (They're not really)

List all that you are paying each month beside each entry on the list.
Now, add up those payments.

Then, re-organize your payments to pay the minimum balance on all but the one at the top of the list.
Whatever is left from your total monthly payments after taking care of the the rest of the list, dump on the one at the top.
You'll reduce the total interest that you pay each month because you'll be hacking away at the balance of the account that charges the most.

Now, when you get that top balance down to zero, take what ever you were paying on it and add it to the next one in the list.
That one will dissappear even faster.
Repeat, until you hacked away at all of your balances.
You're still paying out the same amount each month - even as you knock off balances on accounts.

The neat thing about this is that you don't really have to make more in monthly payments - presumably, you're making the monthly payments already - that amount does not need to change.
You just spread it around more intelligently.

If you can look at your budget and find a bit more each month, throw it at the account on the top of your list and accelerate the plan!

If not, the plan still works.

I've done a modified version of this where I took advantage of a low-interest line of credit and moved a few high interest credit card balances over to it, then hammered away at the remaining high interst stuff. I'm down to one card carrying a balance and my line of credit. I still have a few cards, but I can keep then at zero now, because less of my money is being paid out in interest charges (and I learned how much carrying a balance hurts  ).

It's amazing how easy and plainless it is - because your overall monthly poayments don't have to change - and it really works.

[Charger_Fan]

DCF, that plan of yours sounds very similar to what Dave Ramsey (a guy on the radio) says quite often. I've been working on that type of plan for a while now & it really does work! I haven't even had a credit card for about 4 years now & I simply refuse to get one! The only time I've missed having one is when I needed to get a rental car once.

[400/6/PAC]

Dodgecharger-fan
Thank you for taking the time to reply like that.
Thats information that will change the way I look at dept forever.
All of you have been a great help Thanks for all of your time.
Hope one day I actually have an answer to one of your questions so I can return the favor.