Mike On The Money: Paying off student loans, credit interest, and mortgage rates
THE MONEY. WE WELCOME MIKE GIORDANO, FINANCIAL ADVISOR WITH WILLIAMS WEALTH MANAGEMENT AND A NEW DADDY OF BEAUTIFUL MARGOT. WE SHOWED YOU THE PICTURE LAST WEEK. SHE WAS VERY APPRECIATIVE TO MAKE HER DEBUT. SHE’S LIKE, WOW. JANE KNOWS SHE LOOKS STUNNING. AND YOUR WIFE LOOKED LIKE NOT EVEN 24 HOURS LATER. BUT WE’RE SO EXCITED ABOUT YOUR FAMILY. SO TODAY WE WANT TO TALK ABOUT STAYING A STEP AHEAD BECAUSE YOU’VE GOT THREE LITTLE ONES LIKE MIKE DOES. YOU KNOW HOW TO STAY A STEP AHEAD, PAYING BACK STUDENT LOANS. LET’S START THERE, MIKE, BECAUSE STARTING IN SEPTEMBER, PEOPLE WHO HAD HAD THOSE LOANS DEFERRED BECAUSE OF COVID ARE GOING TO HAVE TO START PAYING IT BACK. HOW DO THEY MAKE PLANS NOW TO HAVE RE BUDGET? YEAH, WELL, THE BEST THING TO DO IS START FOCUSING ON THAT NOW. START THINKING ABOUT HOW CAN I, HOW CAN I SET ASIDE THE MONEY THAT I’M GOING TO NEED? SAY YOU NEED $200 FOR THOSE PAYMENTS, START FIGURING OUT HOW YOU’RE GOING TO GET THAT $200 RIGHT NOW, IF YOU CAN SKIMP OUT ON SOME EXPENSES, THEN THAT’S THE PERFECT WAY TO GO. MAYBE YOU CAN FIND A WAY TO RAISE YOUR INCOME. THAT’S ANOTHER THING. SO THE BEST THING TO DO, THOUGH, IS FIND A WAY TO MAKE UP THE MONEY SO YOU CAN MAKE THE NORMAL PAYMENTS. IF FOR SOME REASON YOU CAN’T MAKE NORMAL PAYMENTS, THERE ARE A WHOLE BUNCH OF INCOME BASED PAYMENT PROGRAMS THAT ARE MORE PEGGED TO YOUR INCOME. SO THE PAYMENTS MAY BE LOWER EARLIER AND THEN THEY GO HIGHER LATER, BUT YOU MAY END UP PAYING MORE INTEREST OVER TIME. SO IT’S A GREAT FALLBACK OPTION, BUT THE BEST THING TO DO IS BE ABLE TO MAKE NORMAL PAYMENTS. GREAT. AND JUST GET IT DONE. ABSOLUTELY. I MEAN, IT’S VERY MUCH LIKE IF YOU HAVE A CAR, YOU PAID OFF YOUR CAR FOR A LITTLE PERIOD OF TIME. YOU DIDN’T HAVE ANY PAYMENTS, BUT THEN ALL OF A SUDDEN YOU WANT A NEW CAR, YOU GOT TO START BUDGETING FOR THAT STUFF. THAT’S GREAT ADVICE TO STAY IN AHEAD OF THE CAR THING. WHAT ABOUT INFLATION? WE’RE TAKING A LOOK AT EVERYTHING HAPPENING WITH INFLATION. EVERYTHING COSTS MORE, INCLUDING WHAT I’M PAYING ON CREDIT CARD. DO I PAY OFF MY CREDIT CARD OR DO I SAVE MONEY? OR IS THERE A WAY TO DO BOTH? THERE’S A WAY TO DO BOTH FOR SURE. THE BEST THING TO DO IS THAT WHEN YOU THINK ABOUT PAYING OFF CREDIT CARDS, ANYTHING THAT’S DOUBLE DIGIT INTEREST OR HIGH SINGLE DIGIT INTEREST, THOSE ARE THE THINGS YOU WANT TO PAY OFF AS QUICKLY AS POSSIBLE. IF YOU’VE GOT ALL THAT, IF YOU DON’T HAVE ANY OF THAT KIND OF DEBT, THEN YOU CAN START LOOKING AT AT PUTTING MORE MONEY INTO SAVINGS. AND WHEN YOU’RE TAKING A LOOK AT TRYING TO COUNTER INFLATION OVER THE LONG TERM, THE BEST WAY TO COUNTER INFLATION ARE GROWTH ASSETS LIKE STOCKS, REAL ESTATE THAT WAY TO A LESSER EXTENT LONG TERM BONDS. BUT IN THE SHORT TERM, IF YOU CAN’T HANDLE ANY PRICE VOLATILITY BECAUSE YOU NEED THE MONEY OVER THE NEXT YEAR OR TWO, THEN YOU WANT TO LOOK AT THOSE HIGH YIELD SAVINGS ACCOUNTS OR MONEY MARKET FUNDS IN A BROKERAGE ACCOUNT BECAUSE THEY’RE PAYING UPPER FOURS 5% INTEREST, WHICH IS BETTER RIGHT NOW THAN THE 3% INFLATION RATE. YEAH, AND THAT’S GREAT TO KNOW, TOO. NOT ALL SAVINGS ACCOUNTS ARE CREATED EQUAL, SO REALLY MAKE SURE THEY AREN’T. SO MAKE SURE YOU’RE LOOKING AT WHAT YOU’RE GETTING PAID. OKAY. SOME PEOPLE WANT TO BUY A HOUSE. MORTGAGE RATES ARE THE HIGHEST THEY’VE BEEN IN A REALLY LONG TIME. HOW DO YOU EVEN BEGIN THIS? LOOK AT THIS 30 RATE, 30 YEAR FIXED RATE, 7.37. WHAT DO WE GO FOR IT? OR DO YOU HOLD OUT AND WAIT TO BUY THE HOUSE? WELL, IT DEPENDS. YOU WANT TO KEEP YOUR YOUR FIXED COSTS UNDER 50% OF WHAT YOU’RE MAKING, RIGHT. AND REALLY DEBTS YOU WANT TO BE UNDER ABOUT A THIRD OF WHAT YOU’RE MAKING. SO THAT’S THE FIRST THING. SO THAT’S HOW YOU MAINTAIN A FINANCIAL RESPONSIBILITY IN TERMS OF THE INTEREST RATES AND ALL THAT STUFF. THE BEST THING TO DO IS IF YOU CAN SOMEHOW SAVE A LITTLE BIT MORE MONEY AND GET A BIGGER DOWN PAYMENT, THEN THERE’S LESS MONEY FOR YOU TO HAVE TO BORROW. IT DEPENDS ON WHAT KIND OF HOUSE YOU’RE LOOKING TO BUY, TOO. IF YOU’RE LOOKING TO BUY A NEW HOME, NEW CONSTRUCTION, THERE’S A LOT OF BUILDERS THAT HAVE PROGRAMS THAT WILL BUY DOWN SOME OF THAT FINANCING COST AND ON THE FRONT END FOR THE FIRST FEW YEARS. AND THEN HOPEFULLY IF RATES FALL BACK DOWN, THEN YOU CAN REFINANCE FOR THE LONGER TERM. IF IT’S AN EXISTING HOME, YOU DON’T REALLY HAVE THAT OPTION. AGAIN, YOU’VE GOT OPTIONS, TAKE A LOOK AT IT AND THEN CREDIT RATINGS, WE ALWAYS KIND OF LOOK AT LIKE, IS IT WHAT IS YOUR CREDIT SCORE? SOMETHING THAT CAN SAVE YOU MONEY AT SOME POINT? WELL, JANE, I MEAN, IT DEFINITELY IT DEFINITELY CAN SAVE YOU MONEY. THINK ABOUT IT. IF YOU WERE LENDING MONEY TO A FRIEND, YOU GOT A RELIABLE FRIEND AND AN UNRELIABLE FRIEND WHO ARE YOU GOING TO MAKE THE WHO ARE YOU GOING TO LOAN THE MONEY TO? RIGHT. AND CERTAINLY AND IF YOU’RE WILLING TO LOAN MONEY TO BOTH BECAUSE YOU’RE SUCH A NICE PERSON. YES. YOU’RE GOING TO LEND MORE MONEY TO THE RELIABLE FRIEND THAN THE UNRELIABLE FRIEND. IT’S THE SAME THING. THAT’S WHAT CREDIT SCORES ARE. THE HIGHER YOUR CREDIT SCORE IS, THE MORE RELIABLE YOU ARE TO PAY BACK THE MONEY THAT YOU BORROWED. AND SO IF YOU’RE MORE RELIABLE, YOU’RE GOING TO TYPICALLY GET A BETTER INTEREST RATE AND YOU’RE GOING TO BE ABLE TO BORROW MORE MONEY AND STAY IN AHEAD OF WHAT YOU MIGHT WANT TO BORROW FOR THE FUTURE. MOST IMPORTANT THING, THERE ARE SO MANY FACTORS CREDIT SCORES. BUT THE MOST IMPORTANT THING IS MAKING THOSE PAYMENTS ON TIME. EXCELLENT. MIKE GIORDANO, IT’S ALWAYS GREAT TO B
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Mike On The Money: Paying off student loans, credit interest, and mortgage rates
Mike Giordano with our Jane Robelot discusses paying off student loans, credit interest, mortgage rates, etc.
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Mike Giordano with our Jane Robelot discusses paying off student loans, credit interest, mortgage rates, etc.
Source: wyff4.com