I'm a long-time member of an international Prison Ministry organization; our local chapter goes into a State Prison on the second Saturday of each month. We meet for breakfast in a nearby diner at 7:30, and go into the institution at 8:30. This morning I heard several slices of life in these tough economic times.
At breakfast a fellow volunteer said he's about to refinance his mortgage: he is 8 years into a 30-year loan at 6% so his primary motivation for refinancing now is of course to get a lower interest rate. But he is having difficulty choosing between a new loan with a term of 15 years versus 30 years (when he asked about a 20-year loan he learned that because those are less common the rates are higher than for either 15 years or 30 years). He would really prefer a 15 year term on the new loan so it will be paid off sooner, BUT his company has been hit very hard by the economic downturn so he fears for his job. A 30-year loan would free up some cash flow, which might be helpful if he faces a spell of unemployment, but he dislikes the idea of taking so much longer to pay if off. My suggestion was get a 30-year loan but use an online mortgage calculator to determine how much more per month he'd pay on a 15-year loan and put the difference into a money-market fund every month. If and when he feels more secure about his job then he can pull his dollars out of the money-market fund and make a large principal payment on the mortgage. The cost of doing this versus going with a 15-year loan would basically be the difference between the APR on his new mortgage versus the APY on the money-market fund.
Inside the prison, an inmate said his daughter just had her car repossessed and may soon lose her house so his grandchildren are without transportation and may soon be homeless; of course there is not much he can do to help from behind bars.
Two other inmates in our group are about to be paroled, so are very worried about how as ex-cons they can find jobs in such a tough economy. And with the State facing a severe budget crunch, guess what's happened to the budget for various training and support resources for prisoners and ex-offenders.
Finally, one of our long-time volunteers has a son who just went into prison on drug charges.
TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
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