Still Paying PMI?

I just got back from meeting with my friend for lunch and somehow we got on the topic of mortgages. He bought a pretty large house (more than he could afford) about 3 years ago. He couldn’t come up with the 20% and is stuck paying Private Mortgage Insurance (PMI). PMI is a portion of your mortgage that you pay to the lender as insurance to them that you can make the payment. You usually pay PMI if you can’t put 20% down on a loan. This also insulates the lender from market fluctuations where the value of the house could be less than the outstanding loan amount, like the current housing mess that is going on now.

Anyway, he took out a 30 year fixed mortgage, so odds are he’s paid some principal down. I told him that he really needs to get rid of the PMI. It is wasted money since it doesn’t go toward your mortgage at all. One thing I recommened he do is refinance with a 80/10/10 loan. What this means is that you take out a mortgage for 80% of the value of the loan, you put 10% down and the other 10% is put into a home equity loan. The 10% down and the 10% home equity loan satisifies the 20% down on the first loan thus avoiding PMI. You can do this same thing when purchasing a home, not just with refinancing.

There are many ways to avoid PMI these days so don’t opt for it just because you don’t have the full 20%. PMI is also very difficult to get out of once you have it on a mortgage. You have to have the lender review the loan to see if the home as increased in equity to satisfy the 20% needed to avoid paying it. You can imagine how hard this must be these days as values are actually decreasing. Your only other way is to refinance, but that can cost you some closing costs.

These days, there is no sense paying more money than you need to, that the would-be PMI and save it for a rainy day instead!

$5 off of $20 at Walgreens Saturday Only.

I was at Walgreens this morning grabbing some last minute things, since after today I don’t plan to go out again until after the mad Xmas rush. Before I left I decided to check their website for any coupons and I found this:

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Simply print this out and take it into your nearest Walgreens sometime Saturday 12/22 and get $5 off of $20. This saves you an easy 25%. Always remember to check websites before you head to stores since you can always find some sort of “in store only” offer.

How Do I Cancel Vonage?

So after 2 months trying out T-Mobile’s Hotspot @Home (my review) and liking it very much, I decided to drop Vonage. Since most everyone already knows my cell phone number, losing my Vonage number wasn’t an issue, except for telemarketers probably.

I was about to embark on a very interesting ride from what I gathered by reading about earlier horror stories of people being on hold for hours before they can reach someone. So reluctantly, I called the customer service number. After navigating through the web of voice prompts I selected the “Cancel My Service”. I figured this one takes you to a hold queue of 40 minutes then to some person that will do whatever they can to not let you cancel.

To my surprise I was only on hold for 5 minutes until I reached Debra (ID: E25293). Here is where the fun begins. She asked the usual account verification questions, then asked my why I wanted to cancel. I told her that I have this new cell phone. (I wasn’t about to explain to her what Hotspot @Home was since I knew she would never understand it). She then started to tell me how much more my cell phone costs than Vonage. I let her go on for a bit, before I started to become agitated and asked her if she heard what I was saying “I WANT TO CANCEL!” She would just ignore that and tell me what a great customer I have been. This went on for about 10 minutes as she asked a list of questions, which I wrote down. I started asking for her supervisor and each time she told me she was an account manager and then proceeded to offer me more free service. I think I was up to about 4 free months before I told her I was calling their corporate office hung up on her. I was pissed. What a waste of 15 minutes!

I almost called their corporate office, but wasn’t sure which number would get me anywhere. After calming down a little I thought about it and came up with the right strategy … Don’t give them a reason to try to keep you. And that means lie if you have to!

Here was the plan. (I wrote down all the questions I was asked on the previous call and devised answers that would not make it easy for them to keep me).  There are the responses I would use on the next call to cancel:

• When asked why I was cancelling: “I don’t use the service anymore” (This was true since I haven’t had the device plugged in for about 2 months)
• When asked what am I using instead of Vonage: “I am using a cell phone” (Truth)
• When asked how much are you paying for a cell phone: “My company pays for it” (Total lie here)
• When asked if I wanted to keep it for a backup: “My wife has a company paid cell phone that we use as a backup” (Again, another lie)
• When asked if I want to transfer my service to any friends or family: “My family all died in a horrific plane crash on the way to a family reunion and my friends are now homeless after the stock market crash” (Some of my finest work ever)
• When asked about the quality of Vonage when I did use it: “There were so many outages. And the wait time to talk to support was ridiculous!” (Partial Truth)
• When asked if there is anything more she can do to help me keep the service: “No Thank You”

Again I placed the dreaded call to their customer service line and the wait time was less then 5 minutes. This time Christine was my account manager. I didn’t even bother to ask for her ID in the beginning since I thought I wouldn’t need it. So I went through all the questions above her and she noted down my responses. Don’t know if she bought the plane crash one or not! After the last question, that was it! She cancelled it, I got a verification email and no more service. Damn they were persistent though. I guess when you are hit with multiple patent lawsuits you need to keep your customers!

I hope this helps anyone trying to get away from that crazy company!!! Just preplan what you are going to say. Don’t give them a reason to try to keep you as a customer. Don’t elaborate on your answers make them short and sweet. And getting angry and asking for a supervisor did nothing. Just keep calm and keep saying “No Thank You!”, if you can last.

 All I can say here is that Vonage wasn’t a bad service, but with that kind of customer service, I will never touch them again!!!!

Pentagon Federal Credit Union Low Home Equity Rates

Ok, I know I mentioned yesterday that taking out a Home Equity loan to pay off cars and other items could be risky. Well if you HAVE to do it, I thought I would offer a reccomendation.

I currently have a Home Equity loan through Pentagon Federal Credit Union. They are essentially a credit union that anyone can join. The reason I went with them was because there were no closing costs. LITERALLY! I asked for $20,000 and they sent me a check for $20,000. No fees, or anything. Not sure where else you can get a deal like that.

They are now offering Home Equity loans up to 120 months with no points or closing costs for 4.99%. The best part is that this is a fixed rate. So it is not going to change for the life of the loan like other lenders do. When I got my loan last year the rate was at 7.24%, so this is a pretty good deal!

Signing up is easy. If you don’t fit in their field of membership then sign up to be a member of the National Military Family Association (NMFA). The cost is $20 to sign up and you don’t need to renew the membership every year to stay a member of the Credit Union. Not a bad way to get you in the door here.

You can get statements in the mail or have everything done electronically. You can even have your loan paid through their website, so no need to write checks. Which means that you can make the payment the day before it is due.

They offer other products as well like cash back credit cards, checking and savings accounts too. Over the year I have had my loan with them I am definetly happy with everything. The next time I need another mortgage or decide to refinance, I am sticking with PenFed. You just can’t beat their low rates and nonexistent fees.

LendingClub.com $25 Signup Bonus Paid Today

Wanted to give an update to my earlier post about the $25 Lending Club Bonus promo. After logging into my account I noticied that I received the $25 bonus today.

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All I did was open a LendingClub account, add my bank, verify it, and transfer in $30. (you only need to transfer in $1 to get the bonus, but I put in more to test their site out with a small loan) Very Simple! And they even posted the bonus to my linked checking account (I blocked it out for privacy sake) instead of keeping it in my lending club account. Not sure why they did that since I thought they would want me to put that bonus back into LendingClub. I am gonna do it anyway! The loan process was very easy and I am currently waiting to see if my bid for the loan gets funded.

That was some of the easiest free money I have made in a while! And remember if you fund the account with $1000 you can get $50 instead of $25.

Cut Expenses this Holiday Season

If you are like me, at this point in the year, the wallet is empty, you are terrified of seeing that American Express bill every time you go to the mailbox and tipping the couch over for loose change isn’t getting you much. I guess it is either time sell a kidney on ebay or start triming your expenses. Since I am selfish, I will opt to cut my expenses. I found the Yahoo! Finance article, Trim Expenses While You Trim the Tree which gives you 100 money saving ideas this holiday season.

Since I am trying to start cutting back more on needless expenses this year, I thought I would share some of these that hit home with me.

1. Watch out for shipping costs when buying via the Internet. Use the Internet to comparison shop, then pick up the item locally.  Ok, if you are paying for shipping when buying on the internet. Please leave my blog now. YOU DON’T DESERVE TO BE HERE! Seriously, you can always find coupons for free shipping, or a minimum purchase amount that will exclude you from it. Especially around this time of your retailers are using free shipping as an incentive to get you to buy, so spend some time researching. Worst case, if you think amazon.com sells the item you want, just spend more than $25 and you will most likely qualify for free shipping.

4. Try a vacation at home. See and do the things you’ve always meant to do and save on hotel costs. The holidays are a perfect time to enjoy local festivities. Ok, what fun is this? I already go out on the weekends when I am home. To me a vacation is getting away for more than one day.

9. If you own a house, use a home equity loan to pay off auto loans. The interest is tax-deductible. I don’t necessarily agree with this. If you do this, you are increasing your obligation on your home which could get you into trouble if you can’t pay the mortgage. Not making car payments won’t equate to you losing your home. Is it worth the interest savings?

10. Pay your mortgage payment biweekly instead of monthly–you’ll save on interest costs and pay off your mortgage sooner. Paying biweekly essentially makes one extra payment on your mortgage a year. The question here is can you invest that money instead at a higher rate than your mortgage? The answer is most likely yes if you got in on a rate in the past 5 years.

25. Sell stuff you don’t need or use anymore on eBay. This is definitely a must, you would be surprised the kind of crap people buy on ebay. It is like the national garage sale!

39. Don’t renew subscriptions to publications you don’t have time to read. This one is for my wife. Sometimes I think she subscribes to magazines just to get mail.

43. Only use ATMs where you won’t be charged service fees This has to be my biggest pet peeve. Nowadays there are so many accounts out there that give you unlimited ATM rebates. And if you don’t want to switch banks then try to plan to get cash when you are near one your banks ATM’s. ATM fees are pure and simple a waste of money. Don’t do it!

47. With the high cost of oil, those hybrid cars are looking more attractive all the time. Check out Hybrid Car Guide for more. Do some research on this first. I have read articles saying that when you end up having to replace the batteries on a hybrid it ends up equaling the cost of paying a little more for gas for a regular car over the life of the car.

56. Take advantage of your employer match in your 401(k) or other retirement plan.  I know we all like having our money now, but retirement planning is important. You should definitely try to max out your 401k if possible. At least contribute up to the percentage that your company matches (if any). That is free money that over time can grow.

83. Turn down your home thermostat a couple of degrees in the winter. I bought one of those programmable thermostats last year. The heat goes down to 60 at night and is back up at 70 by the time we wake up in the morning. I have seen a big dip in our heating costs since installing it. The wife hates it since she is always cold, but then she doesn’t pay the gas bill now does she?

97. Buy an I-PASS and save on highway tolls (in Illinois).  Ok, being from Illinois and spending $40 per month on tolls to and from work, this one hits home. Here if you don’t have an I-PASS, the tolls are double, so there is definitely some savings here. Only issue I have is that now since I have one and don’t have to dig for change, jumping on the toll way for small trips, where I would normally not take it, is becoming very convenient, but expensive. I am wondering if that is what the big honchos over there thought of when they devised this system. Also, lets not forget about the tolls I used to not pay cause I couldn’t find change. Now with the I-PASS, that never happens.

101. Cut back trips to Starbucks or other premium coffee shops. Lets not forget why these bastards make so much money. $3 for coffee? Um, no thanks.

Ok, so I think you are getting the idea that there are ways to cut back. And if you do it enough you would be amazed at what you can start saving!!! Now if I could only stop my obession with buying things off of amazon just cause they are on sale…..

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