Ifinallygota21v

loan rates

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As of Aug 15', MB financial gave me 6.62% 10 year loan. First recreational loan for me, high 700's fico. 35% down by choice (8000 down, purchase was 22,500)

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5 minutes ago, Choiceind said:

As of Aug 15', MB financial gave me 6.62% 10 year loan. First recreational loan for me, high 700's fico. 35% down by choice (8000 down, purchase was 22,500)

Did not mean to hit like... LOL... that seems high to me :(

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12 minutes ago, kerpluxal said:

Did not mean to hit like... LOL... that seems high to me :(

No worries, I anticipated a little higher rate, for a first timer. After seeing this thread I was thinking the same too, however its my first boat, but not my last. There is some good rates out there from the looks of things. Now I know where to shop for a loan.

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I'm a little concerned about interest rate increasing as well.  Unfortunately my rate will only be locked for 30 days and the boat is going to take 10 weeks to build and deliver.  Hopefully rates will not have skyrocketed by then.  

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Stock market at all time high...people are making a lot of money right now. Assuming rates don't get crazy I think prices will continue to rise.  The feds more than likely won't raise rates too high to put a hault on everything. Real estate is also rocking, they are predicting 6-7% increase in our area this year.

Another option is HELOC, you can deduct all your interest paid.

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5 hours ago, Fman said:

Stock market at all time high...people are making a lot of money right now. Assuming rates don't get crazy I think prices will continue to rise.  The feds more than likely won't raise rates too high to put a hault on everything. Real estate is also rocking, they are predicting 6-7% increase in our area this year.

Another option is HELOC, you can deduct all your interest paid.

I like the idea of the interest deduction, but I'm not comfortable using my house as collateral.

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+1. I only want to see my mortgage balance decrease. 

I locked in a 15 year loan at 3.99% on my new order with 10% down last month. 

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Another option is borrowing against your 457 deferred comp.  You pay yourself back the interest.  With our plan we can borrow up to 50k up to 5 years with a 4.5% rate.  A lot of 457/401ks offer this.  It is by far the best way to purchase something because all the interest goes back into your own account.

 

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2 hours ago, Fman said:

Another option is borrowing against your 457 deferred comp.  You pay yourself back the interest.  With our plan we can borrow up to 50k up to 5 years with a 4.5% rate.  A lot of 457/401ks offer this.  It is by far the best way to purchase something because all the interest goes back into your own account.

 

Downside to this is that your retirement assets are not invested during this time. Let's use the extreme of the S&P 500's average return over the last 5 years and you missed out on 14.5% growth per year in your retirement account. There's no making up that lost time. Boat loans at 5-6% aren't horrible.

Edited by Josh4mc
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8 hours ago, Fman said:

Another option is borrowing against your 457 deferred comp.  You pay yourself back the interest.  With our plan we can borrow up to 50k up to 5 years with a 4.5% rate.  A lot of 457/401ks offer this.  It is by far the best way to purchase something because all the interest goes back into your own account.

 

I have seen some people I know with AMAZING old whole life insurance contracts use the policies to fund their toys.  Works the same way as the 401k but without dipping into your growth assets...  And the collateral is your life insurance (which at some point may no longer be needed) as opposed to your retirement assets. Can't stress enough to have an advisor to coach you through decisions and know the pros and cons of your decisions BEFOREHAND and adjust your plan accordingly when a decision is made.

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5 hours ago, BadgerBoater55 said:

I have seen some people I know with AMAZING old whole life insurance contracts use the policies to fund their toys.  Works the same way as the 401k but without dipping into your growth assets...  And the collateral is your life insurance (which at some point may no longer be needed) as opposed to your retirement assets. Can't stress enough to have an advisor to coach you through decisions and know the pros and cons of your decisions BEFOREHAND and adjust your plan accordingly when a decision is made.

I hope they don't brag too loudly about using that approach, except to their insurance salesman.

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12 hours ago, Josh4mc said:

Downside to this is that your retirement assets are not invested during this time. Let's use the extreme of the S&P 500's average return over the last 5 years and you missed out on 14.5% growth per year in your retirement account. There's no making up that lost time. Boat loans at 5-6% aren't horrible.

If your getting a 14.5% return on all your investments please sign me up :-).  There are pros and cons to every scenario.  "Free" money is never a bad thing either.  You could use the cash you were going to use to purchase to also invest and get some type of return.  For some reason paying the bank interest always seems painful to me.  Using your homes equity imo is also never a bad thing, it's just sitting there doing nothing.  A loan is a loan, either way you owe the money regardless if it is in your home or a boat loan.  To each is own.

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11 minutes ago, Fman said:

If your getting a 14.5% return on all your investments please sign me up :-).  There are pros and cons to every scenario.  "Free" money is never a bad thing either.  You could use the cash you were going to use to purchase to also invest and get some type of return.  For some reason paying the bank interest always seems painful to me.  Using your homes equity imo is also never a bad thing, it's just sitting there doing nothing.  A loan is a loan, either way you owe the money regardless if it is in your home or a boat loan.  To each is own.

It's not "free" when you're missing out on the opportunity cost of having it invested. Successful investing isn't timing the market, it's time in the market. 

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1 hour ago, NWBU said:

I hope they don't brag too loudly about using that approach, except to their insurance salesman.

Haha. I think that's hilarious. "Sorry kids but daddy's getting a new boat. Gotta keep me alive for a few more years if you want that money back." lol

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4 hours ago, NWBU said:

I hope they don't brag too loudly about using that approach, except to their insurance salesman.

I was saying this is an option, not the only option.. would you rather put your house on the line or an insurance policy for a TOY? For some people it makes sense, others not.  Again, do what works for you and make sure it makes sense.  But I agree, with others... don't talk finance on a forum (I broke the rule.. yes i know) but shouldn't have even gone there.

Edited by BadgerBoater55

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19 minutes ago, BadgerBoater55 said:

I was saying this is an option, not the only option.. would you rather put your house on the line or an insurance policy for a TOY? For some people it makes sense, others not.  Again, do what works for you and make sure it makes sense.  But I agree, with others... don't talk finance on a forum (I broke the rule.. yes i know) but shouldn't have even gone there.

I wouldn't say you broke a rule at all, the topic is "Loan Rates". More referring to what a horrible product that particular policy is and hoping they don't think it was a smart move in relation to other financing options.

However, I'm probably breaking that rule now by making such a definitive statement, so I'll leave it at that.

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On 1/11/2017 at 2:32 PM, Fman said:

Stock market at all time high...people are making a lot of money right now. Assuming rates don't get crazy I think prices will continue to rise.  The feds more than likely won't raise rates too high to put a hault on everything. Real estate is also rocking, they are predicting 6-7% increase in our area this year.

Another option is HELOC, you can deduct all your interest paid.

Technically it hard for the IRS to prove, but any money from a HELOC not spent on your home can not be taken as a tax deduction. So with the amounts of a boat I would be very careful in regards to not raising a red flag.

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On 1/11/2017 at 10:54 PM, Fman said:

Another option is borrowing against your 457 deferred comp.  You pay yourself back the interest.  With our plan we can borrow up to 50k up to 5 years with a 4.5% rate.  A lot of 457/401ks offer this.  It is by far the best way to purchase something because all the interest goes back into your own account.

 

This makes great sense if the market is about to tank on the investments that are being cashed out.  In that case you get out high and buy more than normal low.

Now if doing it when the market is low that is an awful strategy. 

Generally speaking, retirement loans should be avoided.  That money is in there to work for you. 

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1 hour ago, Koeh0083 said:

Technically it hard for the IRS to prove, but any money from a HELOC not spent on your home can not be taken as a tax deduction. So with the amounts of a boat I would be very careful in regards to not raising a red flag.

This is incorrect. You can deduct up to 100,000 from a Heloc for any reason if married filing jointly. Above 100,000 the deduction must be for a home improvement. 50,000 if you're single.

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6 hours ago, Nitrousbird said:

This makes great sense if the market is about to tank on the investments that are being cashed out.  In that case you get out high and buy more than normal low.

Now if doing it when the market is low that is an awful strategy. 

Generally speaking, retirement loans should be avoided.  That money is in there to work for you. 

Would it be better to pay 2-4% interest on a loan rather than get a guaranteed return of 4.5%? I have no idea what used vehicle rates are right now, I know some new car loans are 1.99% even 0% in some cases.  I will be purchasing a used truck this spring.  I am still on the fence about how I will go about paying for it, I definitely have a few different options.  I really don't want to tie up cash in a depreciating asset, especially a vehicle.

Also, there is a difference from a 457 and 401k.  There are no tax penalties from a loan against a 457 unless you were to default on the loan. A 401k can concur penalties for early withdrawal on a loan.  The 457 seems to be a better option if anyone was considering this.

 

Edited by Fman

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3 hours ago, Fman said:

Would it be better to pay 2-4% interest on a loan rather than get a guaranteed return of 4.5%? I have no idea what used vehicle rates are right now, I know some new car loans are 1.99% even 0% in some cases.  I will be purchasing a used truck this spring.  I am still on the fence about how I will go about paying for it, I definitely have a few different options.  I really don't want to tie up cash in a depreciating asset, especially a vehicle.

Also, there is a difference from a 457 and 401k.  There are no tax penalties from a loan against a 457 unless you were to default on the loan. A 401k can concur penalties for early withdrawal on a loan.  The 457 seems to be a better option if anyone was considering this.

 

Talk to me before you get a loan. Depends on what you are buying and what the manufacturer has for rate specials at any given time. If the sub vented factory rate is 0 or .9%, just make sure you're not giving up rebate money to take the low rate. Timing is everything. Rates just went up slightly but sac credit union has 1.99% up to 84 months right now as a special. 

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6 hours ago, Fman said:

Would it be better to pay 2-4% interest on a loan rather than get a guaranteed return of 4.5%? I have no idea what used vehicle rates are right now, I know some new car loans are 1.99% even 0% in some cases.  I will be purchasing a used truck this spring.  I am still on the fence about how I will go about paying for it, I definitely have a few different options.  I really don't want to tie up cash in a depreciating asset, especially a vehicle.

Also, there is a difference from a 457 and 401k.  There are no tax penalties from a loan against a 457 unless you were to default on the loan. A 401k can concur penalties for early withdrawal on a loan.  The 457 seems to be a better option if anyone was considering this.

 

There is a calculator for this: http://www.bankrate.com/calculators/retirement/borrow-from-401k-calculator.aspx

I wasn't even considering defaulting on a loan...that will ruin you on a 401K for sure.

 

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8 hours ago, isellacuras said:

Talk to me before you get a loan. Depends on what you are buying and what the manufacturer has for rate specials at any given time. If the sub vented factory rate is 0 or .9%, just make sure you're not giving up rebate money to take the low rate. Timing is everything. Rates just went up slightly but sac credit union has 1.99% up to 84 months right now as a special. 

If you guys ever get any used Tundras on your lot lemme know! 2012+, 4x4, limited or platinum, white or charcoal gray :)  I do believe my credit union is also offering a pretty low rate on used vehicles, will have to do some more investigating.  I am looking at April/May purchase.

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