Ask MetaFilter questions tagged with finance and bank

Pay down the mortgage?

acoutu — Fri, 13 Nov 2009 13:19:11 -0800

Should they pay down their mortgage? My friends, who think I'm a financial guru, have come to me seeking some advice on their mortgage. However, while I have an opinion, I thought I'd ask the folks here at AskMefi too.

Should they pay down their mortgage?

Due to several unexpected windfalls, my friends have about $100k in the bank. They have earmarked $25k for retirement savings, general savings, a trip, and so on. They have ample emergency savings and decent retirement savings funds already, as well as college savings. Their car is paid off. They have no debt outside their mortgage. They live on one income and use the other to pay down their mortgage. They have 2 children and one parent works part-time, while the other has a very good job. When the other parent returns to f/t work, their income will rise substantially, but they are already in a very comfortable household income bracket.

My friends can pay up to $65k as a balloon payment on their mortgage each year. They have previously made several balloon payments, but none this year.

Their current *fixed* rate is 5.89%, with 2.5 years left in the term.
Their marginal tax rate is around 35-40%.
Their mortgage payments are around $2050 a month.
The outstanding balance is now $275,000, down from $350k when they bought 2.5 years ago.
Their condo is worth around $600k and is in downtown Vancouver.

If they break the mortgage, they would pay an interest rate differential of about $17k.

They could refinance at around 4% fixed or 2.2% variable, give or take.

They have excellent credit.

My friends think they should pay down their mortgage by $65k, so that they get a 5.89% return with no tax. This will reduce the burden of a mortage (in a city where a house is $1M) and also mean that, when the term is up for renewal in a few years, they can shorten up the amortization or else benefit from much lower payments. They don't think it makes sense to break the mortgage ,since, over the course of the entire mortgage, they would actually save much more by applying the $17k penalty against the mortgage instead. Besides, they have money sitting in the bank.

Does it make sense to pay down the mortgage by $65k?

Thanks in advance.

Does anyone have a Toronto bank that they love?

scrute — Wed, 04 Nov 2009 19:15:02 -0800

My bank has quit the banking business leaving me high and dry -what is your favourite non-TD or BMO banking option in Toronto? I have been a big fan of Citizen's Bank of Canada (not the same as the US bank of the same name) for years, but they have gone out of business. While they have sold mortgages and secured credit to TD, they are leaving those of us with unsecured lines of credit on our own (TD's choice I believe).

I need to replace my unsecured line of credit ($10k) and open a new account. I don't have much in the way of assets but have a stable, reasonable salary and a good credit rating. I also have a relative who is happy to co-sign on a line of credit, but most banks now refuse this practice and I do not want a traditional loan.

I am happy to consider credit unions or similar alternatives. I have had horrible experiences with Bank of Montreal and TD in the past and have no interest in banking with either of those institutions.

So, where can I get my line of credit with a reasonable interest rate and a good chequing account? Bonus points for affordable wire transfers and programs for New Canadians (my husband lives overseas (wire transfers) but will be moving here once we manage to sort out his visa (New Canadian programs)).

Advantages to brick-and-mortar vs. online banking?

xiaoyi — Fri, 01 May 2009 03:04:08 -0800

I found an online-only bank that's better than my current one. Is being able to walk into a brick-and-mortar bank enough reason to keep my current accounts open? In 2007 I opened a checking and savings account at (what was formerly known as) Washington Mutual, attracted by high interest rates and free checking benefits. But after WaMu tanked and was bought out and interest rates went down the toilet along with the rest of the economy, I started looking elsewhere. I've since discovered the interest bearing checking and savings accounts offered by Schwab One, which has twice the interest rate of WaMu/JP Morgan/Chase (which isn't saying much but it's better than nothing), as well as several other benefits.

I already do most of my banking online anyway, and right now the only reason I need to physically walk into a bank is to deposit paper checks. Schwab gives you free prepaid envelopes and deposit slips to take care of that. So is there any reason to keep my WaMu accounts open?

Guide me to well written books about financial crimes

reenum — Tue, 25 Nov 2008 13:49:17 -0800

I want to read more about financial crimes, real and fictitious. Any recommendations? I just read Charlie Wilson's War, which talked about the different ways the CIA laundered money to get it to the mujahideen. I've also read a couple of books about BCCI.

I want to read more about financial crimes. Jewel heists, covert operations, etc. Anything where money is being concealed and funneled to clandestine sources qualifies.

I prefer non-fiction, but well written fiction would also be up my alley.

So I ask the Hive Mind: what should I read next?

How do I check the 'health' of my brokerage?

random1destiny — Mon, 06 Oct 2008 13:58:36 -0800

How can I find out the health of my investment brokerage (like Fidelity.com, E-Trade, etc)? Can brokerages even crash and lose my money like in a bank failure? Much public focus has been placed on having a bank fail and people not getting their money. I know that in the case of banks, the money is covered up to 100,000 of FDIC coverage and there are sites to look up the health of your bank like http://www.bauerfinancial.com which give banks star ratings based on their current financial stability.

However, what if you have your money in stocks/mutual funds in a place like Fidelity.com or E-Trade? Can these places fail and not be able to pay you back? Are there places that rate how safe/healthy these institutions are?

Who's going to be the next Washington Mutual/Fortis/B&B?

fuzz — Mon, 29 Sep 2008 03:31:29 -0800

How can I keep track of the health of European banks? I've got some of my retirement money spread around in banks in Spain, France, and the UK. I'm looking for indicators that help me understand whether my banks are getting in trouble.

Can you give me any Web resources to keep track of which banks are on government watch lists, what the current CDS spreads are, who's got a lot of toxic debt, or any other useful information? Bonus points if you can explain what the indicators mean.

Online banking, credit and investing through one package

Blazecock Pileon — Tue, 24 Jun 2008 23:30:11 -0800

What basic, personal accounting software do you recommend? I would like to track:

• income
• retirement accounts
• out-come, i.e. spending on credit cards and ATM debits

This would preferably be done automatically — the software will contact the banks, credit card companies and other financial institutions electronically and download as much information as possible. We're eight years into the 21st C. and it doesn't seem necessary to spend one to two hours a day manually tracking and entering the day's business-related what-have-yous.

I don't hold investments, but if I gamble I would like to start gambling somewhat intelligently. The software would track investment accounts — and existing retirement account components — automatically on a daily basis. In particular, I'd like to be able to view how parts of my retirement account are valued on a daily basis, which I can't do currently without manually tracking its history in an Excel spreadsheet.

I don't run a small business (yet), so that is not a requirement. If it has the capability to run accounting for a small business that would be a plus.

Another criterion would be that I'd prefer a non-Windows software package, preferably something native to Mac OS X. I can run Windows software within Fusion, but due to cost and integration issues I'd prefer not being permanently locked in to that option. I can run an X11 application, but with the tradeoffs, being able to run something OS X native would be useful.

With that in mind, are there software recommendations you have?

Check Debit Madness

East Manitoba Regional Junior Kabaddi Champion '94 — Wed, 07 May 2008 09:42:27 -0800

Our bank account was debited for a check issued by a different bank. What in tarnation? I gave my doctor a $20 check issued from my Small Town Bank account, check number 1234.

My Small Town Bank website informs me that we were debited for $57, allegedly from check #1234. When I click to view the image of the check, it shows a check from someone else's Chase bank account! The name is different, the routing number is different, the bank is different, the account number is different, the check number is different, the amount is different. The only connection is that both checks were payable to the same doctor.

The money is being refunded. Our Small Town Bank advisor said she'd never seen anything like it in twenty years, and blamed my doctor's bank (but was unable to reveal which bank that was). I'm just glad this other person didn't get a $10,000 hip replacement.

So how did this happen and who's to blame?

This is in the USA.

Is the money supply contracting, or expanding?

Pastabagel — Mon, 17 Mar 2008 11:39:51 -0800

FinanceFilter: Is the money supply contracting, or expanding, after netting all the Fed action, bank closures, mortgage defaults, etc? The dollar falling seems to signal a net increase of money supply, but this is inconsistent with the thesis of a credit or liquidity crunch. If the money supply is growing at a slower rate due to tighter lending practices, shouldn't the dollar be rising, even in the face of Fed-rate cutting? Do we know the net expansion or contraction of the money supply due to the combination of rate cuts and mortgage defaults? I understand that Fed rate cuts have the effect of increasing the money supply. I understand that lower rates lower the value of the dollar, because it puts more dollars into existence tomorrow than existed today, i.e. given a constant demand, the increase of supply lowers the price.

The housing boom that peaked in 2005 involved people borrowing money to buy houses that it turns out they could not afford. This borrowing of money expanded the money supply back then. I understand that as people defaulted on their mortgages, the money supply didn't recontract (as the money that was created was spent on the house and put into the system). But as the dominoes fell, and first the mortgage companies, then regional and national banks, then CDO-holding brokerages and hedge funds were hit and stopped lending out, there should have been an attendant lack of money (from mtge payments, etc.) to lend out to future borrowers. So the money supply in the future should be smaller than we expected it to be last year. Shouldn't this cause the dollar to rise (or fall slower)?

In other words, given the 2005-2006 money supply and interest rates, the dollar had a price. But given future lending trends, the money supply growth should be slower, which other things being equal should increase the value of the dollar, right?

Is it possible that the Fed knows quantitatively the extent of the default/CDO worthlessness problem (and future money supply contraction), and isn't revealing publicly what it knows? If so, wouldn't this mean that when the Fed cuts rates, we don't hear about the amount of the money supply contraction that the Fed's inflationary move is supposed to offset, we only hear about the inflationary part of it and conclude therefrom that the money supply is growing too fast?

Seattle: Need a new credit union or bank!

Bob Dobbs — Thu, 25 Oct 2007 12:56:37 -0800

Seattle: Please recommend a great bank or hopefully credit union Hello All,

We just moved to just south of Seattle. Will likely be moving much closer if not into Seattle proper or north Seattle in the next few months.

I am looking for a great bank or ideally full service credit union. I have a couple needs:
1. Personal checking
2. Business checking and saving
3. Have to have EXCELLENT customer service. ie. I want to be able to email and or call managerial level people at the bank directly once in a great while. Do not want to deal with a central answering service in India. CANNOT deal with large monolithic "you are a number" impersonal banks.
4. Excellent online banking services with easy transfers between accounts. Online bill pay is a nice feature but not essential.
5. We will likely be looking at buying a home and car within the next year or two; would like to have a place that can handle all this for us.

I'm more partial to credit unions if possible.

Thanks!

A check went boiiing

jimmy0x52 — Thu, 20 Sep 2007 07:05:32 -0800

I'm on my mother's checking account (in case of emergency, i believe as just someone who can access it - but not jointly {if that makes sense}) and she bounced a check. What effect does this have on me? I'm wondering if her bouncing a check (or checks possibly) on an account I was added to will have adverse effects on me (credit, etc.)

Thanks MeFi'ers

The More Bank Accounts the Better?

andoatnp — Tue, 18 Sep 2007 09:56:25 -0800

Any reason not to open a couple more bank accounts for all the gifts/rewards/incentives they offer? Right now I have an old bank account from California (checking and savings) and a credit card attached to it which I use frequently, a new bank account for the city I moved to, which doesn't have any branches of my old bank (checking only), and a credit card with a third bank, that I only use a couple of times a year.

This more than covers any banking needs I would actually have, but a number of local banks are offering various incentives to open an account, most enticingly, 75 dollars in free groceries if I set one up.

If I am financially able to park whatever the minimum amount is in a free checking/savings account for a year, is there any other downside to opening up a couple more accounts for the rewards?

I'm specifically wondering if it does any damage to my credit score, as I understand having a number of unused credit cards would. Is there any other reason not to?

Negotiating at end of teaser rate

acoutu — Mon, 18 Jun 2007 14:52:38 -0800

Do most people try negotiating near the end of a teaser rate? When we bought our home last year, we went with a one-year teaser rate, to be followed by a variable or fixed rate based on prime minus X. The time on the teaser rate will expire in a few months. Someone I met recently suggesting negotiating before locking in -- she works for a branch of our bank and said we should try to get a better rate, now that we've had a mortgage with the bank for a while. I was wondering how to go about doing this and whether it is normal. (I'm no longer in touch with this person, who I met during a course.)

I am aware of the benefits/drawbacks of teaser rates, so no need to get into that. However, I did wonder whether others had tried negotiating for a better rate as their teaser rate came to an end. I tried talking to my mortgage broker, but he said those discussions would be between us and the bank, as he's out of the loop now.

I know how to project the costs of switching to another bank vs staying with the rate at my lender. I suppose I could use that as fodder. But other suggestions are welcome. I guess it never hurts to ask, though.

Paying for graduate school

dead_ — Thu, 10 May 2007 08:17:45 -0800

Help me figure out the best way to finance graduate school abroad. This may be a bit of a premature post (as I haven't heard back from all of my institutions yet), but here it goes anyway...

I will be attending graduate school in Japan this fall (getting an MA in international relations). Though I already have some money saved up, it isn't nearly enough to cover everything (not just tuition, but living costs, food, transport, etc).

In all likelihood, I will be getting some portion of my tuition discounted by the university, and will also be able to hold a part-time job on campus in addition to some teaching assistantships. Regardless, this is only a minor amount of money coming in, compared with how much will be going out.

So I need to figure out the best way to finance this. I'm looking for advice on specific banks and loans, as well as advice on financing (international) graduate school in general. This is something that I really want to do, and I recognize the major amount of debt it will be putting me under, so any general comments on the matter (positive or negative) would be great. I'm basically looking for advice on financing graduate school. Help!

Can I ETF to the wrong name?

acoutu — Fri, 05 Jan 2007 15:38:24 -0800

Banking Filter: Can I do an ETF if the bank account number is right but the name is wrong? Last year, I asked about cashing a cheque with the wrong name on it. Flash forward 12 months and I want to know what happens with electronic funds transfer in the same situation.

Google Adsense pays by cash and by ETF. The cheques have both my business name and personal name on them, so I have the choice of depositing to either a business or personal account. However, when you try to set up Adsense for an ETF, it only lists the business name as the account holder. Does this matter? Can I set up the ETF to go to my personal account, which is under my own name?

Thanks.

X marks the spot

ruelle — Tue, 31 Oct 2006 05:30:47 -0800

Hey financial wizkids..... Are some financial products forbidden for Americans? What are X-markets (in plain english)? Click on this Deutsche Bank's page. OK, now pick from the left hand menu some jurisdiction like Switzerland or Saudia Arabia. And.. did you get a disclaimer?

Is DB dividing the global market by jusrisdiction? What is DB offering the Swiss/Saudis/etc that Americans can't get? What are X-markets? What is structured finance? Where can I read about these things in plain english? Thanks :)

All Hail the Union

pomegranate — Fri, 08 Sep 2006 07:55:40 -0800

How do you find and pick the right credit union? I'm finally moving past the bank my parents picked for me 25 years ago, and generally taking more responsibility for smart personal finances. I'd like to move all of my partner and my accounts to a credit union, but I don't know how to pick which one. My partner works for a university now but soon won't, and my company doesn't offer any particular memberships. All the credit unions I see online seem local and really small, is that a problem? Would I get worse rates and benefits if I went with a larger one like Smart Financial? If you use a credit union, how's it going for you?

Internet banking

dpx.mfx — Thu, 15 Jun 2006 04:49:30 -0800

Internet banking - I have an account with ING, and they're fine, but I'd like to find an online bank that has a decent interest rate but 1) doesn't hold your deposits forever before they're available and 2) can transfer money back to my checking account rather quickly. Does anyone have good experience with such a place?

My ATM card was Abused

DickStock — Wed, 08 Mar 2006 05:50:52 -0800

I was robbed. Is my Bank liable? To what extent? Someone drugged and robbed me in a foreign country. Along with cash and possessions, the robbers 'borrowed' my ATM card and 'coerced' the PIN code out of me.

On Feb 2, shortly before midnight, they made three withdrawls of about US$250 each.

At some point, {midnight?} a bank transfer was made into my account by a client.

Then, one hour later, on Feb 3, NINE {9} withdrawls were made, three per machine at three different ATM's over a 23 minute period, totalling about $2000.

Are banks held to any liabilities similar to credit card companies, and isn't ATM software supposed to prevent this sort of fraud?

This was in a "third world" country. The ATM's were local. A police report was filed, but police were no help. In fact, nobody in the main police station spoke English. I had to reply on a local woman who was also a crime victim, filing her own report to help me file mine~!

The first-world bank is so far no help.

OK, dammit. Bangkok, Thailand and HSBC.

Negotiating my variable rate mortgage

acoutu — Wed, 02 Nov 2005 14:36:28 -0800

Can I renegotiate my variable rate mortgage? I have a variable rate mortgage. My rate was 3.65% for the past three months. I just got a notice saying it is now 4.15%, which is .6% below prime. However, the posted rate at the bank is 3.95%. Can I ask for this rate and, if so, how would I do that in the most effective manner?

It bugs me that the bank bumped my rate .5% when the Canadian Bank Rate has only gone up .25% and my bank is advertising that their variable rate is 3.95%. Some other banks have 3.95% rates -- I could move to another bank ($250 discharge fee + $2 months of interest), causing my bank to lose my business.

Any suggestions for negotiating my 1.5-year-old variable rate mortgage?

Getting data from my bank account into Quickbooks?

subpixel — Thu, 27 Jan 2005 16:50:11 -0800

OwnershipSocietyFilter: Is this $50 trinket really the only way to get data from my bank account (Quicken Interchange Format) into Quickbooks? Intuit would like me to make a not-free call to ask the same question...