Ask Money - Most Recent
I have four credit cards each with credit limit above $20,000. I use only one of these high-limit cards, along with one or two other credit cards with limits much much lower. My monthly statements are seldom above $400 to $500. My credit rating is above 800. Since I foresee no more need to have such high limit I am thinking of cancelling three of these high limit cards. Is this a good idea? Will this affect my credit rating? Any suggestions?
What I understand from the research I've done is that the housing market has just about matched inflation over the long term, whereas the stock market has done the best of any investment in any 20 year (or so) period. I'm not just talking about the latest crash, but the scope of the last 120 years. Why do we still want to think of home ownership, and not wealth building, as the "American Dream" to the point where we are still, after the burst of a painful boil/bubble, allowing people to borrow more than they can afford? Personally, I have no desire nor aptitude for home repair and condos seem far riskier than index funds. Why not throw some money away by renting and invest more in the stock market, rather than just barely keep afloat by paying a mortgage and throw money away repairing a home?
In about 2.5-3 years my husband and I have a balloon payment due on a second mortgage. The mortgage amount is 42,000 that we will need to pay back. After the addition of twins to our family in dec. 2011 I became a stay at home mom and while we are mostly breaking even we aren't making a dent in that balloon and have no idea at this point how we are going to pay it back. Our house value is underwater and all attempts so far at refinancing have not resulted in anything. The solution seems to be to take a loan from our 401K but I am sure that there are all sorts of things that I am not realizing or thinking of since the number one rule of retirement finance seems to be "don't touch the 401K". My husband currently makes 100K a year at a stable job. That will never increase but he gets variable bonuses twice a year equaling about an additional 30K. He is 31 and has 190K in his 401K. I have about 90K in retirement savings between a roth IRA and my 401K that I rolled over after leaving work. In a few years I may go back to work but right now that is up in the air. We are just worried that when the balloon payment hits our only option at that point will be to borrow from the 401K and were wondering whether doing it now versus then made more sense. We would certainly save a lot of interest in the mean time on the mortgage.
We have several other debts as well that we are working on including car payments, student loans, and an IVF loan. In a few years our financial situation will be greatly improved with paying some of these off but we will still have the second mortgage to contend with.
Any thoughts would be appreciated,
Thanks, Gin Braband