Money and Finance

[chonies]

starskin, I would strongly advise you to take out another loan for your personal expenses. IIRC, if you're a foreign student in Britain you are permitted to work a limited number of hours, or at least according to a source which may be out of date. But still, you don't want to be stranded in a situation where it would be extremely difficult to get out of. Remember, you're not taking out a loan to trick out a car--you're investing in your education.

[splendagirl]

starskin said:

The only problem is that I have to move to the UK, which has very strict rules about non-EU residents living there. Basically, in order for them to let me into the country and give me a job, I have to prove that I don't need a job. In other words, I have to have a year's worth of money before they'll let me in.

What I'm wondering is if I should take out a personal loan of a few thousand dollars so that when the UK embassy looks at my finances, they'll find them to be satisfactory, and then once I have a job, pay back the bank for my personal loan.

Is this a good idea or not?

Hi Starskin, I think that would work.

Provided that you are able to quickly return/repay the school loan within the specified period. I believe that if you return/repay the school loan within 30 days or something like that, you are not responsible for the loan origination fees, interest fees, annoying school loan officer fees and other governmental loan/load nonsense fees.

If that does not work, do you have a EU friend or family member that could sponsor your visit (presuming of course, that would avoid the nonsense of applying for a school loan)?

[starskin]

Thanks, guys.
I don't know if I'd be able to pay it off quite so quickly, splendagirl, so I'll probably have to pay the fees, but what I was thinking of doing is taking out a loan until I get a job, and once I get a paycheck or two, repay the loan in its entirity. That way I'd only have to pay a little interest and such. My bank doesn't seem to offer personal loans to students to cover living expenses, just loans to cover tuition, so I'm going to have to go through another bank; probably Bank of America.

I'd love to get a sponsor, but all of my friends in England are students or just graduating and so don't really have any money.

I'm still waiting for the paperwork on my student loan for tuition to go through, but that shouldn't take too long--probably another 7-10 days. The visa application is supposedly fairly quick too (knock on wood again), so I'm just wondering when I should apply for this personal loan. Don't want to put the cart in front of the horse, but I don't want to delay things unnecessarily, either! Oy.

And you're right, chonies, students are allowed to work part-time, something like 20-25 hours a week, which won't bring in tons of money, but should help tremendously. And anyway, I doubt I'd have enough energy or time for a full-time job. Now I just have to bribe my friend from Newcastle into hooking me up with a job with some of his friends.

[bklynred]

Topher wrote

Just be careful when choosing the mortgage broker. DO NOT work from a payment number and work you way back to a mortgage.

Wait! Topher, can you explain in more detail, please? I'm trying to work out "how much house (read: junior 1 bedroom) I can afford" and right now the only $ amount I can think to plug in is the mortgage vs. rent $.

I also have a related mortgage question (I know this is simple, but I am sooo out of my depth with this): do I need to get prequalified now? I'm just starting to look. I know I shouldn't prequalify repeatedly because it's tied to my credit report.

[topher]

If you give a broker a ### for a payment, they might push an exotic loan like an interest only loan to get you more house.

It is fine what you are doing. Just be careful of the type of loan you are getting. Also, fully understand the type of loan and how that loan works.


I say get pre-qualified because it is easier to come to terms with the seller.

Don't forget to take into consideration property taxes and condo assessments when calculating your mortgage.

[Oxynia]

I second what Topher said and also advise that when you enter into an agreement to buy a property, make sure your lawyer builds an appraisal contingency clause into the contract. That means you expect the property to appraise for at least the price you agree to pay, as that is the maximum the bank will lend to you. If the appraisal comes in lower and you don't want to or can't pay the difference, you can back out of the deal with no penalty. The seller will have to agree to this contingency clause upfront and if they're sure they are asking fair market value for the property, they shouldn't have a problem with it being part of the contract.

I bring this up because we have a friend who just agreed to buy a condo but the appraisal came in at $100,000 BELOW the agreed-to price. The place is clearly overpriced. He and his wife have no intention of paying that much more than the place is worth so they were able to cancel the deal and walk away when the seller refused to re-negotiate the price. Be careful of greedy sellers, they'll try to take advantage of you, especially if they know you are a first-time buyer.

Of course if you live in a hot market where people really compete for homes, you may have to accept that you'll pay more than the place is really worth. However in that case, the price/value ratio may make it difficult to secure a loan unless you have a lot of money to put down so as to minimise the bank's risk. But right now, it's officially a buyer's market so those kinds of situations are getting more rare. The buyer is in the driver's seat, so be smart and protect yourself and you should be able to reap the advantage.

[bklynred]

Thanks guys! Oxynia, sadly I live in a really hot market. I'm definitely being flexible to other areas than where I rent (and where I'm currently being priced out--homes are going for 3x as much as they used to, it's completely irrational), and have a lead on a few good places. Trying to figure out my downpayment right now.

[Deleted]

Does anyone have any reccomendations for a low-interest rate credit card with flight miles or some sort of advantage? My husband's oldest credit card, from Chase, has inexplicably jacked his rate up to 18.24%. We sent them an e-mail asking about it and their reply was give us a call! Which is annoying. If I wanted to punch a lot of buttons just to have some jackass tell me how awesome they are I would have called in the first place.

Anyway, we have good credit and it needs to be a Visa or Mastercard. Thanks.

[splendagirl]

Hi Georgianna,
This is always an issue for us - finding the best card. I am sorry to report that I have nothing to suggest.

Our dilemma, begins with Citi card, offers cash back with a limit of about $500 a year. No annual fee.

Recently, we received an offer from Fidelity offering cash back with no limit. No annual fee. We will probably look into it.

There may be a good mileage card out there with an annual fee. I am just opposed to the concept of paying them money to give me a little ittle bit of money in return.

I am also wary of the airline mileage cards because whenever I attempt to utilize my points for Northwest Airlines (name, blame and shame 'em), they are booked. The earliest date that I could travel on my points is February 2007. The locale? Rochester, Minnesota.

[Deleted]

Thanks splendagirl. It sounds like the cash back may be the way to go. I'm really only interested in airline miles for the upgrades since we're overseas now. 18 hours in coach is a long ass flight.

I will check into it.