OT - Bank of America

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Dimitrios Paskoudniakis wrote:

Good advice.
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BTW Home loans/mortgages.
$100,000. at 6% for various time periods. Monthly payments.
20 years $716 mo total repay 172,000; Interest = 72,000 or 1.72 times original cost 25 years $644 mo repay 193,000; interest = 93,000 1.93 times cost 30 years $600 mo repay 216,000; interest = 116,000 2.16 times cost 40 years $550 mo repay 264,000; interest = 164,000 2.64 times cost
Just a thought.
So we built our own some 40 years ago and the most ever owed was $12,000, which we disposed of asap. despite a then low salary. So no mortgage!
You can scale this up or down. For example $50,000 as above would be exactly half of the 100,000 numbers . Also for slight difference in interest rate, say 5% instead of 6, you can ratio it a bit and not be too far out, for mental calculation. e.g. 5/6 x 600 per month = $500. i.e. somewhere between $500 and $600 per month. Then then calculate it properly using an on-line progarmme such as < http://www.bretwhissel.net/amortization/amortize.html
Good luck; and aside from credit cards, after all it's OUR money we are paying for housing and home repairs.
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BTW Home loans/mortgages.
$100,000. at 6% for various time periods. Monthly payments.
20 years $716 mo total repay 172,000; Interest = 72,000 or 1.72 times original cost 25 years $644 mo repay 193,000; interest = 93,000 1.93 times cost 30 years $600 mo repay 216,000; interest = 116,000 2.16 times cost 40 years $550 mo repay 264,000; interest = 164,000 2.64 times cost
Just a thought.
So we built our own some 40 years ago and the most ever owed was $12,000, which we disposed of asap. despite a then low salary. So no mortgage!
You can scale this up or down. For example $50,000 as above would be exactly half of the 100,000 numbers . Also for slight difference in interest rate, say 5% instead of 6, you can ratio it a bit and not be too far out, for mental calculation. e.g. 5/6 x 600 per month = $500. i.e. somewhere between $500 and $600 per month. Then then calculate it properly using an on-line progarmme such as < http://www.bretwhissel.net/amortization/amortize.html
Good luck; and aside from credit cards, after all it's OUR money we are paying for housing and home repairs.
__________________________________
I don't know about Canada, but in the USA you deduct the mortgage interest paid each year from your income when determining income tax.
I live in the state of Maryland, and pay 25% USA income tax, and 8% Maryland/local income tax, so about 33% of the mortgage interest (25%+8%) is how much my income taxes are reduced. For example, if someone in Maryland pays $12,000 in the first year of their mortgage in interest and are in the 25% USA bracket, their US tax bill is reduced by $3,000 (25%) and their Maryland tax bill is reduced by $960 (8%). So where you are adding the $12,000 interest in your calculation, you need to subtract about 1/3 of that due to reduced taxes. So you need to multiply all of your above ratios by 2/3.
If you invest the saved taxes in a long-term investment that grows on average 10% per year, and the mortgage interest is 5%, you are better off investing that money rather than paying down the mortgage. Your ratios also aren't yet factoring this in.
But you know all this.
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On Sep 25, 11:19 pm, "Dimitrios Paskoudniakis"

. That makes a lot of sense. But; Not that way in Canada. No deduction of interest from income tax! Either federal or provincial). However if/when you sell your family home and make a profit there is no income tax payable. Also there is no income tax on 'winnings', prizes or gifts.
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stan wrote:

That's how it is (used to be, anyway) in the UK and Australia. Years ago I read in a UK photography magazine: "If you are industrious and sell your photograph, you pay tax. If you are lucky and win a prize with your photograph, you don't pay tax."
Perce
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stan wrote:

Some time in the remote past, our betters decided it was in the best interest of the nation to encourage home ownership, hence the income tax deduction for mortgage interest - an incentive, if you will.
In 1976, under the Carter administration, the Community Redevelopment Act was passed to further encourage home ownership by those who couldn't really afford it - the loans would be guaranteed by Fannie Mae and Fannie Mac.
Now both Fannies don't make loans themselves, they just semi-guarantee them.
In 1995, under the Clinton administration, new regulations were put in place to encourage banks and lending institutions to make these dodgy loans ("if you don't make the loan we'll shut your ass down" was the operative phraseology of the regulation).
Anybody who could stand up, hear thunder, and see lightning got a loan.
No problem as long as housing prices kept increasing. Couldn't make the balloon payment? No problem - just refinance the house.
In about twelve years, everybody who wanted a house had one. The bottom fell out of the housing market. Mortgages could not be refinanced at a higher value. The world's economic system came tumbling down.
But, the goal of the liberals was achieved: universal home ownership was achieved.
Next target: universal health care.
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In article

Neither is yours either. Actually both are right and both are wrong as both (along with Greenspan's too lax too long money policies, changes in the way both mortgage and banks were regulated in the early 00s, and other things too numerous to mention) all put us in the jackpot we are in today (including to a certain extent nothing worse than returning to the mean).
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Kurt Ullman wrote:

From everything I read you are correct. Both "sides" participated in the "crash".
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George wrote:

I called my bank a few days ago to check on a transaction. In their typically very friendly way, they added a little promotion to the conversation - offering savings accounts. Starting at one-half of one per-cent interest. Methinks we and our banking system are insane.
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wrote:

I'm with you, Smitty Two. It just isn't any good for a pinco like me to throw money away. Responsible finances are a must. You can't afford it? Don't get it as a homeowner, and also don't give it as a bank. I don't buy it as a Clinton imperative at all.
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Smitty Two wrote:

You actually believe two Democratic administrations, with bills authored by Barney Frank, were trying to do a favor for investment bankers?
That really doesn't pass the giggle-test. Really.
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HeyBub wrote:

So you actually believe the drop all the regulations because we can trust everyone to do the right thing Reagan thinking wasn't responsible for dropping numerous banking regulations which allowed super mega mergers of banking and investment institutions with minimal regulation had nothing to do with last year's implosion? You might want to hit the red kool-aid a little less if you don't.
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You think the Democratically controlled Congress did not agree to go along with these. The NYT "Nobel Laureate" Friedken a few weeks ago was tearing his hair out and Raining Fire And Brimstone down on RR because of a bill that was passed changing the regs. Never did hear from him when I looked in Thomas and noted that that particular bill had passed both Houses of Congress nearly unanimously. (Although credit where due, Barney Franks has actually voted against it at least three times (once in committee, once when the House passed it the first and a third time when the final conference committee bill was passed). Real CONVENIENT memories some people have. You might want to consider cutting back on your Kool-Aid consumption, too.
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George wrote:

Yep. It wasn't the LACK of regulation, it was too much of the WRONG KIND of regulation. Specifically the requirements that lending institutions serve "underserved" areas.
Cruise through the worst parts of your town. You'll find a Bank of America branch sandwiched between a pawn shop and a Stop-&-Rob in neighborhoods where the only other retail businesses on the street are hookers and crack dealers. Do you think BoA or Wachovia or Washington Mutual opened those branches because of rational business decisions?
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HeyBub wrote:

That what Limbagh told you. None of this would have worked if there also weren't massive opaque institutions who could manufacture the CDOs and other paper to keep the scam running as long as it did.

Banks have always made money from the poor.
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George wrote:

Sure, you think they're making money off you're checking account balance? Well, they are, maybe a few fractions of a cent. But they're really making money off of overdraft fees, credit card interest (especially "penalty" rates) etc.
nate
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Which are, for the most part, voluntary on the part of the user.
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Kurt Ullman wrote:

Pretty much, yes. However poor people, or people living paycheck to paycheck, are much more likely to pay those fees, esp. the high credit card interest which sometimes is not voluntary (e.g. emergency medical or auto repair expenses that need to be paid for somehow.)
for instance, maybe 10 years ago I got a fix-it ticket for a cracked windshield on my car. It wasn't dangerous (despite what the officer said) but I had to get it fixed somehow. Because my car was older and uncommon, a new windshield was $500ish, and because I'd received a ticket that had to be cleared within a week, I didn't have time to call around to a bunch of junkyards to find a used one. I didn't have $500 in my bank account. What's the solution to that, other than a) drive illegally or b) use credit card? (I'm doing much better financially these days, thanks for asking...)
Now whether that is fair or not to charge high interest rates to someone whose only fiscal fault is not having a considerable amount of personal savings, that's another discussion. Personally I think it's far better to try to make oneself indispensible at work, advance to a higher paying position while not greatly increasing one's personal expenses, etc. but like I said, that's a separate topic.
nate
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Clark Howard has been telling how bank debit cards, they allow overdraft sales, and then soak your money up, with overdraft fees. He reccomends writing the bank and declining the overdraft protection. Better to get "sale declined" at the terminal than a $30 ++ over draft fee on your statement later.
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That's what NPR told you.
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