WOW! Gone for 3 months and I get to miss gems like this one! It seriously explains *why* the most difficult tradelines to remove are from the sub-prime lenders (who obviously want to keep you at subprime!).
Should this thread be archived in a read only file never to be brought forward again? No, it needs to be brought forward into the lime lite so that more and more folks will get the message.
Butch, "Fire is the test of gold, adversity of strong men". --> What Is Validation! --> Rule Of "72" And Your Score ------------------------------ Archiving old threads to a read only file will do away with signature links to them like butch does above.
Why? You could still read it, and anyone could search for one of Butch's posts, click the link in his signature and read the thread. Archiving it doesn't mean it's gone from the board, just that it is read only, you can't reply. In fact, it is referenced in the Hall of Fame thread, and anyone can click to it from there. Putting a lot of meaningless posts at the bottom of the thread only loses the "meat" from the top. Especially since it's referenced in the Hall of Fame list (which, by the way, is read only), I think this thread should be closed!
Yuppietrasâ?? Dilemma: http://consumers.creditnet.com/straighttalk/board/showthread.php?s=&postid=376340#post376340 Ok Yuppie, lets take a look at a conventional mortgage. Go to: http://www.myfico.com ... and you'll see a chart which contains 6 rows of interest rates you may expect to pay, based upon your score. They are: 720 - 850 - 5.645% 700 - 719 - 5.770% 675 - 699 - 6.308% 620 - 674 - 7.458% 560 - 619 - 8.531% 500 - 559 - 9.289% Below that you'll see the following note: Information for 30-year fixed rate mortgages Your score, as you've stated, is in the mid 500's. This means you'll be paying close to the interest rate in the bottom category above, (9.289%). Now go to: --> Good Mortgage Calculator Lets look at a hypothetical mortgage loan of $100,000, for 30 years. The result: @ 9.289% Monthly Loan Payment: $825.50 Number of Payments: 360 Cumulative Payments: $297,186.15 Total Interest Paid: $197,186.15 Well ... with some patience and work you CAN make the top bracket, and pay only 5.645%. Many, MANY of us have. @ 5.645% Monthly Loan Payment: $576.92 Number of Payments: 360 Cumulative Payments: $207,690.97 Total Interest Paid: $107,690.97 The difference then is a mortgage payment of an EXTRA $248.58, PER MONTH !!!!!! ($89,495.18 in EXCESS Interest) But that's only the first half of the story. VERY BAD!! Suppose rather than pay this money to the mortgage company in extra interest you invested it instead, and further suppose you average 10% for the length of your loan, 30 years. (not hard to do) Bounce over to: --> Good Savings Calculator! With discipline your savings can yield the following result: Current Savings: $0.00 Years to Save: 30 years Interest Rate on Savings: 10.00% Contribution Frequency: Monthly Amount Saved Per Period: $248.58 Total Contributions: $89,488.80 Number of Contributions: 360 Total Interest Earnings: $477,105.89 Interest Earnings Percentage: 533.15% Total Projected Savings [LOSS]= $566,594.69 Now then, are you quite sure you want your desire for a quick mortgage cost you over half a million dollars? You see, just because your scores are low doesnâ??t mean you're â??screwedâ? at all, heck that's nothing, because we can fix that. But you certainly WILL be screwed if you get a mortgage now, and never learn the brute force of compound interest. Imagine all those seniors out there who've spent their whole lives losing huge amounts of money because of ignorance, and now it's TOO LATE to fix it. This is what I mean when I keep saying low FICO Scores can literally screw you out of becoming a Millionaire. So the discipline part starts today. Lets put that mortgage off for now and get to work on those reports. We wouldn't steer ya wrong. So ya see aren't ya glad you're only 30? Things are lookin up already. .
1*Imagine all those seniors out there who've spent their whole lives losing huge amounts of money because of ignorance, and now it's TOO LATE to fix it. 2*This is what I mean when I keep saying low FICO Scores can literally screw you out of becoming a Millionaire. Butch =================== 1*And guess who's getting all that money that they are loosing! 2*Who is getting their millions folks.
=================== 1*And guess who's getting all that money that they are loosing! 2*Who is getting their millions folks. ~~~~~~~~~~~~~~~~~~~~ A donkey had an IQ of 186. He had no friends at all though. Even in the animal kingdom, nobody likes a smart-ass. Government Waste is a Terrible Thing to Mind ***FICO FARCE*** http://members.aol.com/victcrdrpt/Score.html THE END ** *** ** LB 59 """"```--~~~~~~~~~--```'""'''
The exact number of "72" or "78" really depends on the interest rate. This is the exact rule number (rounded) with corresponding interest rate. interest rate Rule number 1% 70 4% 71 7% 72 10% 73 13% 74 16% 75 19% 76 22% 77 25% 78 28% 79 31% 80 34% 81 37% 81 40% 82 43% 83 46% 84 49% 85 52% 86 55% 87 58% 88 61% 89 64% 90 67% 91 70% 91 73% 92 76% 93 79% 94 82% 95 85% 96 88% 97 91% 97
The Rule of 72 and the Rule of 78 are two different things. The Rule of 78 (which can be a different number, depending on the term of the loan) is how front-loaded interest is determined on a loan. The Rule of 72 is for compounding interest, either for you or against you. It assumes a compound on unpaid balance each month, sometimes called "simple interest" because it's not front loaded. The Rule of 72 is that you take 72 and divide it by the interest rate. This will tell you how many years it takes for your money to double. So if you're getting (or paying) 12%, the amount will double in 6 years. At 6%, it will double in 12 years, and so on. So you want an higher interest for MAKING money and a lower one for SPENDING money (meaning it takes longer for the interest to compound enough for you to pay double what the original loan was).
Re: Re: Rule of "72" And Your Score Yeah, you don't EVER want to allow a lender to charge you by the Rule of 78 if you are planning or intending to pay the debt off early. You will be screwed. (Learned that the hard way) Bought a car that we paid off early. The payoff was several hundred dollars more than we expected, as a direct result of the Rule of 78. At the time we didn't contest it, we were in the middle of a crisis at the time (my sister, on hospice, was living with us at the time and shortly thereafter died). Several months later, they mailed a check to us for even more money. When they realized their mistake, they wanted the money back. We challenged them on the original issue, and they sent our original application (not a copy) back to us. Guess what, it didn't match our copy of the contract. Their's had the rule of 78 box checked, while ours didn't. Hmmm, a nice case of fraud. We challenged them on that basis, and got to keep our portion of the money. Anyway, another lesson learned.
