Monday, April 30, 2007

Home Equity Line of Credit Option

I was browsing around various Home Equity Line of Credit (HELOC) offerings on the web and looked up the current HELOC offering by our current mortgage lender. Our HELOC has been on the variable interest rate of Prime plus 0.50%, which today equates to 8.75%. Our balance is about $33K and remaining credit available is $30K. We have the line opened since we bought our first house about 3 years ago, and have been paying $75 annual fee for the last two years. Our first mortgage balance is slightly below $200. So our current combined LTV is 76%.

I was surprised to see that the lender is no longer charging the annual fee for lines with balance greater than about $20K. So, I decided to call the customer service. I explained to customer service representative the situation, and before even I told her what I wanted, she asked me "So, do you want me to waive your annual fee?". Certainly I answered, "Yes, of course." The annual fee waiver will be in placed when we receive the first month bill of our 3rd anniversary in a couple of months.

This is a good development since I plan to look around the HELOC offering to lower the interest rate. Our current HELOC imposes penalty if it was closed before the 3rd anniversary. So far, I have found that Citibank current offering is good: Teaser rate of Prime - 2.26% for the first 6 month, and Prime - 0.76% thereafter. I calculated in the first year, we could save about $600. I need to find out how much the closing cost would be. Citibank charges $50 annual fee, requires auto deduction, and charges penalty for early closure (in 3 years). If we are to pay closing fees, the rate could go even lower by 0.25%.

I have looked at E*TRADE, Bank of America, and Wachovia, but none could match Citibank Offering. Last place to look is Costco Services (LendingTree), but the ads says that the lowest it could go is Prime - 0.50%.

Some other thoughts about $75 annual fee waiver
The quick thought that came to my mind after I spoke to the customer service representative is that financial institutions could waive some fees quickly if they want to. I was thinking that "Mmm, maybe they make sufficient profit that they do not hesistate to grant waiver to customers who call." However, they still want the customers (you!) to call them, rather than granting the waiver to all customers. I still remember reading reports about people calling their credit card companies just asking them to lower the interest rate on the credit card balance. (Not) surprisingly, many of the requests are granted. Other possibilities include that given the state of business competition in the U.S., financial institutions will do what it could to keep the customers with them, and waiving fee upon request is one of the ways to do so.

Receiving $100 Banking Bonus Money

I'm pleased to report that both my spouse and I received $50 each in BB&T Free Checking Banking Bonus money early last week. We only need to keep the accounts opened for 90 days, which would mean about 60 days from now. I should say that I'm getting more comfortable in finding this kind of deals now :-)

Sunday, April 15, 2007

2006 Federal and State Tax Filing

Last week I managed to complete the filing of our 2006 Federal and State Tax return. I have an educational background and professional certification in finance and as such, I have been preparing our family's tax return by myself with the help of TurboTax software. This year, we are expecting a federal tax refund of $4,163.00 and a state tax refund of $1,555.00 -- A total of $5,718.00. Our joint 2006 adjusted federal gross income is $147,856 with taxable income of $95,697, which puts us to the 25% marginal tax rate bracket (for Married Filing Jointly Status). The actual tax liability is $16,649.00 and our effective tax rate is 11.26%. Since we are e-filing with refund being requested through direct deposit to one of our Checking accounts, I'm expecting to receive the federal refund by April 20, 2007 and the state refund between April 22-28, 2007. Let's see whether refund timeframe (as estimated by TurboTax and IRS) turns out to be true.

4/19/2007 UPDATE: The State Tax Refund Payment Arrived today
The state tax refund of $1,555.00 has been posted to the checking account today, so it took only about a week and it certainly beats the expected timeframe.

4/20/2007 UPDATE: The Federal Tax Refund Payment Arrived today
Uncle Sam keeps his promise: The federal tax refund of $4,163.00 has been posted to the checking account today. We are pleased by in the influx of the cash flow and I will immediately transfer the total refunds to the Savings account.

This year may be the last year where we could contribute to both my Roth IRA and my spouse's Roth IRA. We have been able to allocate $4,000 to each of our Roth IRAs and $2,000 to each of our children's Coverdell (Educational) accounts.

We will need to adjust our tax withholding with our employers and set up a direct deposit so we are not lending Uncle Sam tax too much free money. I have heard that tax withholding formula is complicated, but also heard that TurboTax will be able to help me. I will get on to this task shortly.

Committing ourselves to the Rich Dad Coaching program

About one or two weeks ago, we decided to apply for a spot in the Rich Dad Coaching program, and we are pleased to let you know that we have been accepted to the program after going through two interviews and submitting our written response on questions related to our motivation on planning to get rich. Last week received the Choose To Be Rich program and we have been diligently studying the material and working on our homework. We are pretty excited about the program and look forward to getting it started soon. Through the program we have been matched with an investor who will guide us with our Personal Success Action Plan throughout Phase One (which lasts 17 weeks) and Phase Two (which will last until one year from now).

Friday, April 13, 2007

Receiving $150 banking bonus money

As I have covered in this post about the many banking accounts that we have, I'm happy to report that HSBC has posted $150 bonus money to our Interest Checking accounts ($75 for me, and $75 for my spouse) on early April 2007. We opened the accounts in early March 2007. Off to the temporary 6% Online Savings accounts the bonus went (through online transfer)!

What is interesting is that we both shared only one Online Savings account with balance a little bit more than $3,000. This balance turns out to qualify each of our own checking accounts so that we do not need to maintain any amount in the checking accounts or to have direct deposit to the checking accounts. We are so pleased with this fact because we share the $3,000 minimum balance requirements and are able to maintain that balance in relatively high interest Savings account.

Now, I'm waiting for the BB&T bonuses to be posted. The BB&T promotion page mentioned that they should be posted by the end of April.

Wednesday, April 4, 2007

ING Direct Sign Up Bonus

We have been banking with ING Direct since 2000 with their online Orange Savings products, and we have been very happy with the products, customer service, and rates. We recently opened an online Electric Checking with them as well.

The Orange Savings account comes currently with 4.50% APR with no minimum balance requirements and no fees! Your savings are FDIC-insured and accessible 24-hour through the website and phone. You could link up to 3 of your current checking accounts at other financial institutions, so you don't have to switch your current banks.

If you are interested to sign up, use one of the following links to receive $25 sign-up bonus, which would be posted immediately. To receive the bonus, you should fund your account with $250 from your checking account (not including the $25). I will receive $10 from this referral. The account opening process is a breeze and within 5 minutes, you should be able to log in to your new account.

> ING Direct Sign Up Bonus #5 (Will open in a new window)

> ING Direct Sign Up Bonus #6 (Will open in a new window)

Each of the links above is good for one person only, therefore I put down multiple links. After you click through the link, at the top of the second page it will say something about the $25 bonus (i.e. statement like this: "Start savings with a great rate. To receive your $25 bonus, open and fund your Orange Savings Account with at least a $250 initial deposit.") and you will know the link is still good. Here's how a good second page will look like:



Otherwise, the second page will show error messages with red font. I will maintain the freshness of the links above periodically; If all the links are used up, please email me at freeatforty@gmail.com, and I will supply new fresh links.


How many banking accounts are too many?

How many Checking, Savings, CD, and Brokerage accounts do you have?

We, for one, maybe have too many! We have checking accounts with Chevy Chase Bank, Citibank, HSBC Direct, and BB&T, and Savings accounts with Citibank, ING Direct, Emigrant Direct, and HSBC. We have 4 CD accounts at ING Direct (2), Emigrant Direct, and Chevy Chase Bank. We have one or more accounts with each financial institution. We have brokerage account (ONE account) with Ameriprise. So far, we have been happy with our selections. Our accounts with HSBC and BB&T were opened for our funds to chase promotion money and better rates! I think why don't I get our money work harder by earning this free money.