The Snail is creeping - Capital One Nov. '09 update

Another month, another $11.35 off the balance of this one!

Extra Money I'm not sending to the Creditors

I can't remember exactly when my father started sharing his AT&T dividends with me. I know it was before the Ma Bell divestiture in 1984. And I'm thankful that I did inherit at least of a bit of his 'savings' gene. I have never spent any of the money he sends to me quarterly. It has always gone to savings. In the early years, I put it in a regular savings account. I've also bought U.S. EE Savings Bonds, a Tennessee zero coupon bond, shares of SBC Communications (now AT&T)...all which I still own today. I even used some of that money to buy shares of Qwest Communications and Washington Mutual which turned out to be not such wise decisions, but I was investing it and NOT SPENDING!

When I received my check from Dad earlier this month, I checked the current rate on I-Bonds. For the six months ending April 30, 2010 they are paying 3.36%. Getting a Treasury Direct account set up takes a little time for them to mail you a verification card in the mail. But once the account is set up, it's so easy to buy Savings Bonds! And I choose to let them hold my bonds electronically. No more worries about keeping up with those little paper bonds! I just placed my order tonight for a $100 I-bond. I know I won't get rich off 3.36%, but I love adding to that little nest egg that I know I've received from my father.

Back in the Saddle

Well, I never really got off the saddle. The horse just took off like a wild mustang for a few days! Life has been extra busy this week! I have lots of catching up to do this weekend, so hopefully you'll see multiple progress reports and I can catch up on your blogs too!

We DID end up closing on MIL's house on Monday! That is such a relief. Being an executor is more stressful than I ever realized it would be. Having the house sold (AND being able to use a part of dh's portion to pay off debt) is such a weight off my shoulders.

Friday the 13th

Yep! I had a bad feeling about setting the closing the MIL's home on Friday the 13th. Sure enough, the appraiser had used the term "condo" instead of "P.U.D." and the lender would not release the funds. Why the lender waited until today to let anyone know this is beyond me. They've only had the appraisal in hand for two weeks! The appraiser was out of the office today, but everyone has assured me it will be corrected on Monday, and the buyer will be able to complete the settlement Monday afternoon.

Avoiding interest on the credit card balance

A second month of avoiding interest on the balance of the Kroger credit card. The hardest part about this is remembering to make the payments immediately. I try to clean out the receipts from my purse every day (or every day that I've actually spent money). I record them on my Microsoft Money software, update my Excel spreadsheet with this month's budget, and then log on to the credit card payment site and transfer the payment. I have noticed that when life gets really crazy (which it has been the past week or so), I get behind on this by 3 or 4 days. That's not been a problem yet, but I just have to make sure that 3 or 4 days doesn't turn in to 3 or 4 weeks. If it does, my strategy is shot.

The current statement from this credit card shows:

Previous Balance $713.93
Payments/Credits -$819.65
Transactions $783.82
FINANCE CHARGES $0.00
New Balance $678.10

As you can see, I did find an extra $35.83 to apply to the balance of this loan bringing my new total to $678.10. That little calculator on the ticker is just moving on down the line!!

HELP!!!! It's Decision Time!

I know I've already expressed my fear at the thought of interest rates rising. Last month, I even blogged about developing a plan to convert the HELOC to a fixed-rate for my peace of mind in case the finance gurus predicting inflation and high interest rates are right. Even if we don't see double-digit rates again, it seems kind of silly for a rational, otherwise logical-thinking person to hope that interest rates would remain at historic lows for any extended length of time.

So now that an answer has seemingly dropped in my lap, why does it scare me so much?

And yes, I'm talking about the HELOC. That $86K balance on the line of credit tied to our rental property. The one with that enviable rate of prime minus one-half (currently 2.75%).

My late MIL's home is set for closing at the end of next week, and I think with our proceeds (after splitting with all the other siblings) we'll be able to knock the balance on this one down to the $45,000 range...which is less than half of where it started. I want to jump for joy since that will actually pull the property into a positive cash flow situation. Even letting me build up a little more savings for the inevitable repairs and maintenance all properties have.

So wouldn't you know it? My HELOC lender sends out this offer to convert all OR part of your LOC balance to a fixed 4.99% rate amortized up to 15 years. No hassle, no re-applications, no appraisals, just a $100 set-up fee. I called the toll-free number today, and they said I would just need to stop by the local bank branch to sign an authorization. And, as part of this special offer, they're even going to throw in a $500 Visa Gift Card if I do this before the end of November!

But arrrgh...that means I have to pay 2.24% more in interest each month plus the principal portion since it will be on a 15-year amortization. I know (or at least I think) it's the right thing to do, but it means my payment will actually go up $150-160 from what I've been paying these past few months instead of being cut in half. That means I'll need to continue to fund this property each month until the first mortgage is paid off in exactly 46 more payments.

Does this sound like the perfect answer to my dilemma? As I've typed this out, I think maybe it is (and oh my, someday I'll have to tell you about all the coincidences that led us to our current home---definitely a God-thing). The offer arrives within the same time frame that the balance is reduced using the money from the sale of MIL's home (fingers crossed for getting everyone to the closing table). There are no significant closing costs so it wouldn't feel like I wasted money refinancing it if we decided to sell the property when our tenants' lease runs out. When and if interest rates start rising, I KNOW I'd sleep better with the assurance of a fixed payment that is actually paying off principal too!

I'd love to hear your opinions. Is this the right thing to do?

Money Market Loan update

Because I was able to get in a couple of hours of overtime in last month, I chose to send $47.30 on this loan back to my money market account.

I'm not sure what the right word is to express my feeling about ignoring this for so long. Is it denial? Refusal to admit one of those stupid mistakes? Regardless of what it is, I'm now determined to pay myself back and get that emergency fund back where it ought to be.

The new balance that I owe my money market account is $4653.21.