I really dislike banks...

[Saki]

So I've been trying to get a loan so I can buy this Buell someone I know has.. I just need 1500 dollars.. I have heard all kinds of excuses from banks on getting such money so I can start my credit and be like the rest of America and in debt. lol I'm probably going to have to just save the cash up and buy this bike with cash. One was almost willing to give me the loan but then told me I needed 2500 to get the loan then LOL told me my down payment wasnt enough now and I'd need a cosigner.. (Note the 03 XB9r's are valued at a min of 2500 and this one is worth at least 3k)

I really just think I need to give up on the idea of having credit at all, Ive had a good job but just cant seem to get a loan for that small of an amount.

 

[Rocan]

man, dont buy shit without having the money. no matter how good it looks. Be smart with it... build your credit and your OWN money, and then buy. My parents taught me that much, and I know they are right. Dont spend money you dont have. when you have it, dont blow it. save it. when you have what you need and have that bit extra, THEN buy what you want.

my father works as a superintendent. But hes smart with his money, and because of it, he is able to buy lots of nice things comfortably. Not true with many people i know that make nearly twice what he makes.

Save. Save. Save.
8)

 

[boingk]

On the flipside, getting a credit rating can really help you if you use it wisely.

Example, I've got a $6k student loan that I used to buy textbooks and my first motorbike. I'm paying it back pretty quickly and should end up with a good rating out of it. Come time to buy my own home or a new car or whatever, they'll see that and I won't have any unforseen hassles. Plus, if you get injured and have to rest up until you get comped then a credit card will really come in handy.

Definitely listen to what Rocan is saying, though - cash is king and if you learn to save now then you're set for life. I have a mate who earns $80k a year and hasn't got shit to show for it because he gambles the majority and then pisses the rest up the wall. Go figure.

- boingk

 

[Saki]

On the flipside, getting a credit rating can really help you if you use it wisely.

Example, I've got a $6k student loan that I used to buy textbooks and my first motorbike. I'm paying it back pretty quickly and should end up with a good rating out of it. Come time to buy my own home or a new car or whatever, they'll see that and I won't have any unforseen hassles. Plus, if you get injured and have to rest up until you get comped then a credit card will really come in handy.

Definitely listen to what Rocan is saying, though - cash is king and if you learn to save now then you're set for life. I have a mate who earns $80k a year and hasn't got shit to show for it because he gambles the majority and then pisses the rest up the wall. Go figure.

- boingk

Yeah, I'm trying to build credit but kinda impossible when they give you no chance to

 

[forcefanajd]

On the flipside, getting a credit rating can really help you if you use it wisely.

Example, I've got a $6k student loan that I used to buy textbooks and my first motorbike. I'm paying it back pretty quickly and should end up with a good rating out of it. Come time to buy my own home or a new car or whatever, they'll see that and I won't have any unforseen hassles. Plus, if you get injured and have to rest up until you get comped then a credit card will really come in handy.

Definitely listen to what Rocan is saying, though - cash is king and if you learn to save now then you're set for life. I have a mate who earns $80k a year and hasn't got shit to show for it because he gambles the majority and then pisses the rest up the wall. Go figure.

- boingk

paying loans back faster than you should actually hurts your credit, just an FYI. the fastest way to build credit is to pay your minimum payment and just go steady with it, i know it sucks cuz you see almost no change on your bill but by paying it back fast the people you got the loan from or the credit card company or what have you dont make as much money on intrest and it screws your credit, i have lots of debt right now and my credit rating is hovering around an 800 which is unbelievable for my age. also, dont apply for loans or credit cards too much as that will also effect your score.

 

[chris73cb175]

man, dont buy shit without having the money. no matter how good it looks. Be smart with it... build your credit and your OWN money, and then buy. My parents taught me that much, and I know they are right. Dont spend money you dont have. when you have it, dont blow it. save it. when you have what you need and have that bit extra, THEN buy what you want.

my father works as a superintendent. But hes smart with his money, and because of it, he is able to buy lots of nice things comfortably. Not true with many people i know that make nearly twice what he makes.

Save. Save. Save.
8)

parents taught you well. wish mine would have. learned the hard way but now my debt is clear wasn't much anyways luckily but now i save and save and watch what i buy. it helps saving definitley if there is an emergency. if we only knew what we know now back when we were young

 

[Saki]

mostly I just wana try to build my credit while I get a bike I can easily save up the cash.. But kinda figured, hey why dont I help myself out and get myself a bike at the same time. But since no credit they wont have squat to do with me and give me the stink eye when I walk in even.

I tried the credit card route, but the one card I could get kept screwing me over on fees.. So I ended the account with them, its positive info on my record.. Thing is all the more non-shadey cards wont even give me one due to limited credit...

 

[forcefanajd]

mostly I just wana try to build my credit while I get a bike I can easily save up the cash.. But kinda figured, hey why dont I help myself out and get myself a bike at the same time. But since no credit they wont have squat to do with me and give me the stink eye when I walk in even.

I tried the credit card route, but the one card I could get kept screwing me over on fees.. So I ended the account with them, its positive info on my record.. Thing is all the more non-shadey cards wont even give me one due to limited credit...

which is why you have to start with a card with a high APR and suck it up till your credit gets going a little bit

 

[Saki]

which is why you have to start with a card with a high APR and suck it up till your credit gets going a little bit

tried that, they never reported on my credit so... pretty much they politely screwed me over.

 

[forcefanajd]

tried that, they never reported on my credit so... pretty much they politely screwed me over.

it doesnt happen over night man.....it takes years till your credit does anything. youve gotta start somewhere, just take a loan for $2500 and find someone polite enough to cosign then youll have some cash to either pay back part of the loan or you can buy a couple mods for the xb9. (love those bikes btw)

 

[boingk]

Exactly, you can always draw down all of the loan and then instatly pay back what you don't use...or set it up as a weekly transfer, whatever.

Cheers - boingk

 

[killerdwarf]

credit is nothing but trouble, and is exactly why the whole world economy has gone for shit. If you can't afford it, don't buy it. Sure!! I'd love a brand new CamaroSS, but I don't have 40,000 in my pocket, and I sure as Hell ain't paying someone 4,000/yr. and having a 10'000 dollar car in 6 yrs which I paid 60,000 for!!!!! Sounds absolutely fucking retarded to me!!!!!!! I'll just keep my 12 year old truck which I paid cash for thank you.

 

[Saki]

credit is nothing but trouble, and is exactly why the whole world economy has gone for shit. If you can't afford it, don't buy it. Sure!! I'd love a brand new CamaroSS, but I don't have 40,000 in my pocket, and I sure as Hell ain't paying someone 4,000/yr. and having a 10'000 dollar car in 6 yrs which I paid 60,000 for!!!!! Sounds absolutely fucking retarded to me!!!!!!! I'll just keep my 12 year old truck which I paid cash for thank you.

I'd like to own a house someday, I don't buy things normally outside of my cash limit and now even some jobs require good credit.

 

[t71ford]

That is a smart tack, too! How many contracts require some for of good credit history?

Here is another idea on credit: Very few things are as as cheap now as they are ever going to be. Granted, most toys depreciate, but there are many things that, when taking into account tax rates and rising inflation, are simply at their cheapest today. Take say a house. That house is worth $100,000 today. If you take out a loan today you might get the house for payments of $800/mo, and pay a total of $130,000 for the house if you make minimum payments for 30 years (obviously paying extra will lower the amount of interest paid. However, if you try to save your $800 mo (usually impossible since you are paying rent, too which is money lost) at the end of 30 years you will have $130,000 just in time to find that the cost of housing for a comparable house has risen to $150,000 or more. Plus, you have been paying rent for 30 years and have flushed a good portion of your income into never never land as well.

Now, my numbers are not perfect, but are pretty good approximations. Also, I am not criticizing renting, debt, or saving. I am just saying that like many things, some credit can be used as a wise financial tool, to put you quite a bit further at the end than you would have otherwise been. The key is to using it as a tool toward a means, and not the means in itself. Management is everything.

 

[gsdapollo]

So I've been trying to get a loan so I can buy this Buell someone I know has.. I just need 1500 dollars.. I have heard all kinds of excuses from banks on getting such money so I can start my credit and be like the rest of America and in debt. lol I'm probably going to have to just save the cash up and buy this bike with cash. One was almost willing to give me the loan but then told me I needed 2500 to get the loan then LOL told me my down payment wasnt enough now and I'd need a cosigner.. (Note the 03 XB9r's are valued at a min of 2500 and this one is worth at least 3k)

I really just think I need to give up on the idea of having credit at all, Ive had a good job but just cant seem to get a loan for that small of an amount.

Let me give you a little advice. The lending industry has gone back to their lending standards from 15 years ago. Everything is credit score driven. You dont have the score, you dont get the money. I dont know how old you are but Im assuming your fairly young if you dont have any real established credit history. If that is the case, then my suggestiong to you is to wait until you get a credit card offer in the mail that has 0% financing for at least a year. (Make sure thats not 0% on just balance transfers or cash advances, they can suck you in with those by making you think its for purchases when its not). Then use it to buy groceries or gas and pay off the balance every month!! If you choose to keep a balance on the card, then DO NOT go over 1/3 of the limit on the card as this will negatively impact your credit score. For someone just starting out, you do not want a personal loan being the path you take to build your credit. Then do this for a year or so and as long as you stay on top of it and dont go past 30 days late, you will see you credit score start to build up. Banks are basically interested in how capable you are in paying back the money they lend you, and if the credit report doesnt convince them of that, then they wont take the risk, even for 1500, without sticking you with an insane interest rate. Im a mortgage broker and I own my own company and my father did the same thing for 30 years so we know quite a lot about the lending industry and how it works. We do a lot of credit repair and it truly is sad how credit card companies and the credit reporting agencies fuck you for every penny you got.

Credit can be a great thing or the worst thing to ever happen to you, and it all boils down to common sense. Dont buy what you cant afford. I have been fortunate enough to be around friends who were VERY responsible with their money while I watched other's live like kings and not have a damn penny to their name. I've had clients who were millionaires and couldnt get a loan because their credit report was 15 pages of delinqiuncies, Chapter 13's, and god knows what else. Develop good habits while your young because its almost impossible to do when your married and have 2 kids.

 

[boingk]

t71ford - why the hell would you pay off an empty house while you pay rent?? I'd either live in the house myself, or get some other sucker to pay it off for me (through rent) while I live somewhere else. Sounds logical right?

gdsapollo - good to hear from somone who knows ths stuff well! That advice sounds pretty good and the details are what makes it all stick. Thanks again.

Cheers - boingk

 

[gsdapollo]

t71ford - why the hell would you pay off an empty house while you pay rent?? I'd either live in the house myself, or get some other sucker to pay it off for me (through rent) while I live somewhere else. Sounds logical right?

gdsapollo - good to hear from somone who knows ths stuff well! That advice sounds pretty good and the details are what makes it all stick. Thanks again.

Cheers - boingk

Thanks, maybe someday I'll start a thread on how credit companies work, should give you guys a much better understanding of how to use your credit. Not to say everyone is irresponsible because whether you have good credit or not, its always good to know how to play the game with these assholes. It's much easier to build good credit than to fix it. But I think you took t71's post the wrong way. Basically what he was trying to say was that owning a home might seem like a lot but after 30 years, you at least have a tangeable asset on your hands as opposed to renting which is basically flushing money with no chance of a return. That doesnt mean that owning a home for 30 years will net you a profit, but generally speaking, barring any major financial meltdown, you have a decent chance of your home appreciating in value in 30 years. The pro's for renting would be your hidden costs of maintenance are very low if nothing at all, you just have to live there and pay rent. No fixing the leaking roof, black topping the driveway, fixing the leaking downspout thats flooding the basement or any of that shit. And you more or less are not tied down with a mortgage and can even live month to month in some cases which is great if your constantly moving around or changing jobs. On the other hand, you pay rent every month and have no chance of seeing that money go back into your pocket. Owning a home is definately more difficult than renting and often times more expensive when you add in hidden costs, but you at least have the chance of a return when its sold.

 

[t71ford]

Sorry if you misunderstood, Boink. Gsdapollo has pretty much summed up what I was trying to say. My point was that if you make the house payment to yourself (without actually owning the house, because you want to pay for it cash when you save it all up) you could come up short at the end of the same period of time than if you had used your good credit to buy a house. I am actually doing what you suggest, I have a couple houses and renters, etc. in addition to my own residence. They are all bought with lower interest dollars from yesterday, and, while everyone else looks forward to depreciating dollars for tomorrow, my house payments just gets cheaper. On a fixed low interest loan (bought with good credit), I pay nearly the same amount each month for a set period of time. When was the last time you saw a stick of gum get cheaper at the store, or saw the pay for an hour of work at $1.50? They have all gone up (perceived of course), and the same is still true. The only advantage is that the house payment does not. gsdapollo also stated well the case for renting, if that is your particular situation. Just be aware that you never get any rent money back (although you are only reasonably assured that you will get your house "investment" back as well :) I was just trying to argue the point that credit has a tangible value in that you are buying in todays (usually) cheaper dollars. And in a long term investment, that can pay you handsomely.
I think the bottom line to credit has been previously spoken, in that banks want to see your ability to handle money. This is seen through your credit score. And frankly, there are a lot of periphreal things that are affected in a huge way by your credit score. Life is much easier with a good one. I am a big fan of the "pay your credit card off once a month" plan. You are much less likely to get into trouble, and if planned right you are not really ever buying things you cannot afford.

Oh well, I think we are missing the point of the original post, and are kind of actually taking the tack of "Money Matters"

 

[boingk]

Cheers for the clarification there guys, I posted that before I left for work and it must've gone over my head. Just got back then and it makes a lot more sense!

Definitely agree with owning your own home, and I'll probably start off by getting a small investment home ($120k~$150k) and renting it out after a few quick renovations, assuming it needs them. Meanwhile I'd live somewhere else in something I could afford to pay a mortgage on by myself, assuming it wouldn't over extend me between that and the investment place. While it may not be a 'sure-fire' investment, I'd place a decent wager on the house being worth not just 'more', but comparatively more in 30 years.

Anyway, back to the original question...I got a student loan that was a bit of overkill - I really only needed a few grand to get my first bike and some textbooks. I ended up with 6k (allowed me to do a few fun things for a change!) and am now in a part time job and paying it back comfortably at $75 to $100 a week. Interest is around $50 a month with the rate running at something around 10.7%, and really isn't bothering me as I'll have this thing paid off in just over a year.

Bottom line? I wouldn't worry about borrowing more than you really need. You can funnel the loan back into itself in a lump sum or weekly repayments and just use what you actually need, or you can do what I did and pay it back afterwards in the hope of getting a good rating out of it.

Cheers - boingk

 

[gsdapollo]

Cheers for the clarification there guys, I posted that before I left for work and it must've gone over my head. Just got back then and it makes a lot more sense!

Definitely agree with owning your own home, and I'll probably start off by getting a small investment home ($120k~$150k) and renting it out after a few quick renovations, assuming it needs them. Meanwhile I'd live somewhere else in something I could afford to pay a mortgage on by myself, assuming it wouldn't over extend me between that and the investment place. While it may not be a 'sure-fire' investment, I'd place a decent wager on the house being worth not just 'more', but comparatively more in 30 years.

Anyway, back to the original question...I got a student loan that was a bit of overkill - I really only needed a few grand to get my first bike and some textbooks. I ended up with 6k (allowed me to do a few fun things for a change!) and am now in a part time job and paying it back comfortably at $75 to $100 a week. Interest is around $50 a month with the rate running at something around 10.7%, and really isn't bothering me as I'll have this thing paid off in just over a year.

Bottom line? I wouldn't worry about borrowing more than you really need. You can funnel the loan back into itself in a lump sum or weekly repayments and just use what you actually need, or you can do what I did and pay it back afterwards in the hope of getting a good rating out of it.

Cheers - boingk

Investment homes are great for a lot of reasons, but there are a few things that you need to make sure you have covered before you go into them. A: make sure you have good tenants that pay on time, and take care of the house. B: make sure you have a repair fund available of at least a grand sitting in the bank, that way your covered for most repairs without having to take it out of your own pocket. C: the most important, is whether or not you can afford both your own home and the investment property. This may confuse the crap out of you but Ill try to make it as clear as i can. Lets say you currently own a home and want to purchase an investment property to rent and hopefully make some money. Now lets say that the investment home your buying does not have any current leases (no tenants), well the bank is going to include the full payment on your current home, plus the new payment on your investment property when qualifying you. So unless you make enough money to meet the front and back end qualifying ratios which now include the loan payments on both homes, plus any other obligated debt (ie. car loans, student loans, credit cards), you will not get a loan for the investment property. Now lets say the investment property your looking at has a 1 year lease on it (the tenant is signed for 1 year), then the bank will only include 75% of that properties gross income towards qualifying. So lets say the PITI (principal, interest, taxes, insurance) on the invesment property is $1000/month, and you charge the tenant $1200 to the live there. What the bank will do is: 1200 x .75% = 900 --- $1000 - $900 = $100. They will take the $100 of debt left over and add it towards your total monthly obligated debt when they go to qualify you. On the flip side, lets say you were a prick and charged 1500 to live there, in this case it would be: 1500 x .75 = 1125 ---- 1125 -1000 = 125. The bank will add that 125 as income towards qualifying which will allow you to qualify for a little bit more. Even further, the bank will not consider any income whatsoever from the property if there is not at least a 1 year lease.

So basically you either have to make enough money to qualify for two homes, or find a home in good shape with a tenant that has at least a 1 year lease that brings in enough so that 75% of the gross income comes pretty close to if not more than the monthly obligated payment on the home so that you have a better chance of qualifying for the home.

I know im getting way of topic here but I've seen to many people screw up their lives because no one gave them the info to make the most informed decisions. Besides, screw this up and chances are there wont be any money for future bikes...