Leaving a House to the Kids

Proverbs 13, 22 reads, That's 800-525-7000. This is Faith & Finance Live!

Biblical wisdom for your financial decisions. Well, one of the most common sentences included in a will is this, My estate will be divided equally among my children. That's fairly easy to do when the estate consists entirely of financial accounts that can quickly be converted to cash for distribution to heirs. It's quite another thing when the estate contains property as most do.

It immediately forces your heirs, usually your children, to make a difficult decision. Do they continue to hold the property in joint ownership or do they sell it and divide the proceeds? A third option exists if one or more heirs are willing to buy out the others. Ideally, the heirs will all agree on a fair and equitable settlement. That usually means selling the home and splitting the proceeds. Or the heirs could decide to divide up other assets so that one or more heirs is able to hold on to the property. But far too often, heirs have trouble reaching that kind of agreement. Deciding as a group what to do with property becomes a complicated business. There are serious financial and emotional considerations. Financially, what you think is a blessing may actually become a burden when you factor in maintenance costs, taxes, insurance, homeowners association fees, and other expenses.

Who makes decisions about maintenance and hires contractors to perform needed work? Will the heirs divide those expenses equally? What happens if one heir doesn't pay his or her share? Sometimes, depending on location, the property becomes something like a timeshare for the various heirs and their families.

But then who determines the schedule for using the place? Emotionally, inheriting real estate may cause heirs to make unwise decisions based on feelings rather than wise money management. In many cases, the family home becomes a money pit that fosters arguments among surviving children who can't even agree on minor things like what color to paint the living room. Children often have different ideas about what to do with inherited property based on their experiences growing up. Resentments that were hidden for years may boil up to the surface when mom and dad aren't around anymore. That's often made worse when one sibling is made executor of the estate.

That person is then in a position to lord it over the others. Or the opposite can happen with the executor heir taking grief from siblings who all demand different things. Handling the estate becomes a nightmare for them as siblings squabble. So as a side note, consider appointing an outside executor or personal representative for your estate. To avoid these potential problems with leaving a house in joint ownership to your heirs, many experts suggest you handle it like any other asset in your will. Simply stipulate in your will that upon your death all property will be sold and that the proceeds then are to be divided among your heirs. When you do that, some heirs may decide to take the proceeds of that sale as a part of their share in the estate. Others may want to buy out the others if they want to take on full ownership of the home or vacation property. By the way, you don't always have to divide the proceeds equally among your heirs. In his book Splitting Heirs, financial teacher and author Ron Blue says that if you love your children equally, you will treat them uniquely in your will. Some may have greater needs than others.

Some may not be able to handle money as well as others. In those cases, dividing things equally may not be best for your heirs, but the key to making any of this work is transparency. You should discuss your wishes with your family so that no one is surprised after you go home to the Lord.

Everyone needs to understand not only your decisions but why you made them. By having serious discussions about your estate ahead of time, you can eliminate the potential for infighting and resentment later, especially if you make it known that all real property is to be sold upon your death. That's one less thing your heirs can squabble about. If you need help drawing up a will or changing one, it's important to work with an estate attorney who shares your Christian worldview. You can do that by finding a certified kingdom advisor. Just go to faithfi.com and click Find a CKA.

That's faithfi.com and click on Find a CKA. Well, I hope those suggestions will help you avoid conflict among your heirs and give you peace of mind. All right, your calls are next, 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. We'll be right back. All right, from leaving a house to the kids to whatever you're thinking about today, give us a call. It's time to take your calls and questions at 800-525-7000. Our team is standing by. We'd love to hear from you.

Maybe you have a question that's been rolling around in your mind related to your investments, your debt repayment, maybe it's your giving or how to control spending, whatever it might be. We'd love to hear about it. 800-525-7000. Maybe you have a testimony as well today. We'll certainly take that as well. If you'd like to share God's faithfulness in your life, maybe recently or over decades, whatever that might look like, share that with us at 800-525-7000. Let's begin today in Colorado. Ray, thank you for calling.

How can I help? Hi, thank you for taking my call. I'm self-employed and I have some debt, approximately $22,000 including, you know, a vehicle that I have financed. And the interest rates seem to keep going higher and higher. And I was wondering if it would be feasible for me or better for me to take out a loan on a piece of property that I own that's worth quite a bit and maybe pay off that debt. And then I would have a lower interest rate, you know, on a land loan than on my other debt. And I would be able to pay that off if I wanted to.

Pay that off within two years. Okay. And tell me about this property that you're talking about. You mentioned it's a piece of land, but what else might you share? Well, I live on it. Okay. It's completely paid for.

It's just a couple of acres. You know, it's worth a bit of money in today's where we live. Yeah.

Very good. And what type of debt do you have that you would be refinancing? You mentioned a car. What else beyond that? Credit card debt. Okay.

Yeah. You know, I'm not a big fan of this approach, Ray, for a couple of reasons. I mean, I certainly get that you want to reduce the interest rate and you're looking at the total outlay of interest over the life of the payback. And you're saying, could I restructure this in a way that's going to get me out of debt quicker or with less interest or both?

And I can certainly appreciate that. I think there's the other considerations to look at would be number one, we've got to look at the cause of the debt in the first place. So often when we refinance or consolidate consumer debt, specifically credit card debt, often we're treating the symptom and not the problem that led to the debt in the first place. Now you may say, Rob, that's been rectified and we'll talk about that, but usually it's lifestyle spending beyond your means. And when you come in and wipe it out and kind of don't do the hard work of right-sizing the budget and paying it off over time, you know, what my experience over decades of doing this is that folks will call back six months later and say, all right, Rob, now I've got the consolidation loan and guess what?

The credit card debt is back. So that's my first concern. But why don't you speak to that? Do you feel like that's a potential problem? Oh, yeah.

That's why if I did this, I would definitely know the credit cards would have to go. Yeah. Yeah.

Okay. Well, I think the bigger issue, though, is just really dialing into that spending plan and just making sure you can live on a disciplined fashion. But I get what you're saying is that if you were to do this, you could cut up the cards and that wouldn't even be an option. So if you were willing to do that and really stick with that approach and not open another card at some point when things get tight, then that certainly could solve it. But it's all got to start with spending your spending plan and living within your means.

And I think your ability to do that over the long haul is good. The second issue is there's costs associated with taking out a mortgage. So if you get that land loan, in addition to just the interest rate, there's actually the cost of the closing and, you know, the dock prep and, you know, the commissions to the various people involved.

And so, you know, just the by virtue of you taking out this new loan, even if the interest rate is lower, it's there's still going to be a cost to it. And if you're thinking you have enough surplus to pay this off in a relatively short period of time, I'd probably rather see you stick with this car loan and just attack it and then put the credit cards into a debt management program where they stay right where they are. The accounts get closed, but the interest rates come down and the combination of one level payment going through a debt management company like Christian Credit Counselors, which is a not-for-profit that we use here at Faith and Finance.

Hundreds and hundreds of our listeners have used them successfully. That lower interest rate with that debt staying right where it is is going to help you pay that off 80% faster. And in my experience, it's a more permanent solution because you kind of do the hard work of paying it off over time.

You spend less in the way of interest because the interest rates are reduced. We attack that car loan right where it is. We're not taking that taking out a new loan.

There's no fees associated with that new mortgage. And we're not securing your property, your primary residence or the land under it to this debt, which is currently, at least for the credit cards, unsecured. So something really just tragic happened financially and you were unable to pay.

There's very little recourse, perhaps a judgment that they could get against you, but they can't take your property. Whereas if it was collateralized by this debt, they would have that option. So I think all that to say, Ray, if it were me, I'd probably let's go back to the spending plan, try to really dial into where can I cut expenses so I can free up margin, demonstrate to yourself you can live within those means, take that surplus and let's put these credit cards into a debt management program at christiancreditcounselors.org. Let's send as much as we can every month beyond the monthly payment to get that paid off. And once it is, then we focus on the car loan and we don't take out any new debt to do it. Does all that make sense?

And what are your thoughts? Yes, sir. Yay. Thank you.

OK. Yeah. So I think your next step is work on that budget and then call my friends at Christian Credit Counselors or just go online at christiancreditcounselors.org. And I think they should be able to assist you. You'll be pleased at what you find there.

They're wonderful people that just want to serve the body of Christ. God bless you, Ray. And if we can help further in any way, give us a call back to Oklahoma. Hey, Jay, you're next on the program. Go ahead, sir. Thank you for taking my call.

I'll try and be as brief as possible. I'm in a very unique situation in that I am 100 percent debt free and due to some recent world events, have inherited a large sum of money, approximately half a million dollars from my mother's estate. I have I've actually received the money. It's actualized, but I now have an opportunity to purchase a piece of property that has a functioning house on it, does not need any work. It's turnkey for approximately one hundred fifty thousand dollars, which is well under market. And I'm thinking about using that as a rental for some future reasonable income. I am capable of maintaining the property.

So it's not like I'm going to have to hire someone to be a handyman. My question is the value of the investment in the property versus putting that money in like a CD right now at today's rates, which would be the better investment? Yeah. Did I hear you say, Jay, that your inheritance was a half a million dollars or was it one fifty? No, my inheritance was roughly a half a million. So I have money here to to play with and I'm wanting to invest it wisely and try to multiply my talents, really.

So if you were to put it into this property, you'd still have three hundred fifty thousand left you could do something else with? Absolutely. Okay.

Yeah. Well, I like this a lot. I mean, obviously, I have no idea about the property, its condition, its location, the rental rates, the strength of the market in that area. But what I do love is that, A, you're going into it with no debt service. So that's going to put you in a great position because you own it free and clear.

So if a renter left or you didn't get as much as you thought or we got into a recession, you should be fine. Number two, you're handy. That's half the battle. And then number three, you're diversified. So you take three fifty.

Maybe you get a certified kingdom adviser at our website, faithfi.com, to manage the three fifty. And now you're diversified not only in your investment strategy, stocks and bonds, but even yet another asset class with real estate. And I think heating the Council of Scripture and Ecclesiastes around diversification and putting this money to work makes a lot of sense.

I want to get your thoughts. Stay right there. We'll be right back on Faith and Finance. Delighted to have you with us today on Faith and Finance Live.

Hey, we are listener supported, which means this radio broadcast, our app, all of the team here at Faith and Finance Live is listener supported. And so if you would consider a gift to the ministry, we'd certainly be grateful, especially as we head toward our fiscal year in and just a couple of months. This is a really important time of the year for us to finish strong and prepare for our next fiscal year, if you will, of ministry. And your support of this work goes a long way to helping us do what we do. You can give quickly and easily online at faithfi.com. Just click Give. If you found benefit from this program, you tune in with regularity, you consider yourself a part of the faith and finance community, we'd love to invite you to invest in this work. And we'd certainly be grateful. Again, faithfi.com. That's faithfi.com.

Just click Give and thanks in advance. All right, we've got some lines open today. We'd love to hear from you with whatever you're thinking about financially. Here's our commitment to you to be encouraging, to be hopeful, and to be biblical. We want to start with God's Word, not tack a few Bible verses on top two of our answers, but really start with a biblical worldview of money and money management, recognizing God owns it all. And we're stewards and money is a test. And it's a testimony.

It's also a tool to accomplish his purposes. And we'll try to help give you some answers that are practical but rooted in biblical principles. The number to call with your questions today is 800-525-7000. All right, back to the phones, we go to Austin, Texas.

Mary, thanks for your patience. Go ahead. Hey, I'm wondering about the necessity of a trust and a will.

And I'll tell you what we've done. In Texas, they allow for a transfer on death. Yes. So we've got two bank accounts, two cars, and a house. Yeah.

And that's pretty much all our assets. And have done transfer on death to each other, to my husband, to me, and me to him. And then to our daughter, who will be executor of the state if we're both gone. Yes. We also have a will for the little stuff, you know, grandma's picture and, you know, that kind of stuff.

Yes. So yeah, it sounds like you should be covered. Now, let me just give you a disclaimer here. I'm not an attorney, so it's always good to get professional legal counsel. But I can talk to you generally about how these things work and anything specific to the state of Texas, you'd of course want to get legal counsel as well.

But in general, I like the direction you're going here. So this TOD, transfer on death account, which has to be a specific title, type of account, and not everything applies. As you said, there's going to be personal effects that you'll have to deal with in a will and sounds like you've done that. But that transfer on death for those accounts, that's not going to pass through probate estate. Those non-probate assets are going to be paid directly to the beneficiary or beneficiaries of the account.

And so that's really helpful to have. You asked about a trust, at least I see you inquired about that when you called, and what I would say is not everybody needs a trust by any means. You may be fine with your TODs and your will, which is going to cover really everything else that doesn't have a TOD assigned to it. The only reason you might want to have a trust is if you wanted your assets to pass beyond the TOD outside of probate. So you didn't want anything passing according to the probate courts.

You wanted it outside of the public record. You wanted more control over it in the sense that maybe if you and your husband were incapacitated, or if one predeceases the other and then one is incapacitated, the trust could go into effect. The trustee could handle your assets at that point. They could be handled after your death so they don't have to be distributed right away. It could be passed according to your wishes based on certain triggering events, whether it's the beneficiaries receiving or reaching a certain age or a level of maturity, things like that. So if you wanted a bit more control over the assets, a trust can accomplish that. But apart from that, I think what you're doing with the transfer on death plus the will should have it covered.

And then beyond that, what you'd need to make sure of is that you have some of these other documents that are important for end-of-life decisions like a living will, a durable power of attorney, for financial responsibility if one of you is incapacitated, and then even a health care surrogate to make health care-related decisions. But if you have all of that in place, you're probably all set. Well, okay. We're just waiting for the horn to blow and us to go.

I like that. My friend Ron Blue, the author and teacher, says we need to be ready to live or die, give or go. And it sounds like you guys are right there. And certainly the Lord's not done with you yet. And so you're still living out his calling.

But none of us know the day or the time that we will meet the Lord face to face. And so we certainly need to be ready. And that includes this last stewardship decision that you will make, Mary. And that is the transfer of God's assets to the next steward. Mentioning Ron Blue for a moment, he would ask the question, is the next steward chosen and prepared?

And I think that's a great question we all need to be asking whenever we have this conversation. Thanks for your call today. To Idaho. Hi, Cynthia. Go right ahead. Hi.

Okay. Yes. In light of all the bank failures that's going on, I would just like to say that I was just wondering about the online banking. Is that still a safe and secure, secure place to go to?

Yes, I would say that it is. You know, what's interesting is that, you know, we're seeing a big migration to the online banks now. You're probably not going to be surprised to hear this. A third of the youngest adults have abandoned brick and mortar branches altogether. And so they're, you know, a full 36% of this demographic is now banking online. You know, the problem that we saw with these particular regional banks was really related to a couple of things. Number one, they were concentrated in a sector of the economy that was high growth. And in light of the prospect of recession and high interest rates and the contracting money supply, they needed a lot of cash to keep payroll going for companies in many cases that weren't profitable because they're startups. When they pulled all that money out, these banks had to sell their assets, their long-term bonds at a loss, and that precipitated all of the issues here.

That's a pretty unique situation. The online banks typically will manage their portfolios better. The risk was not managed well with this particular bank.

And I think the other issue is they were highly concentrated. Most online banks are going to have a wide range of customers as well. Many of them are owned by big institutions as well.

So one that we talk about called Marcus, for instance, they're owned by Goldman Sachs. So I think bottom line is you have nothing to worry about with FDIC insurance. Thanks for your call. We'll be right back. I'm so thankful you joined us today on Faith and Finance Live as we mind the scriptures and apply God's timeless, transcendent wisdom to your financial decisions and choices. We've got some great questions coming up, but room for maybe one or two more at 800-525-7000.

Hey, just a quick note before we head back to the phones. You know, often we're getting calls from many of you and emails who are looking for options for what I call faithful investing. You want to apply your biblical values to the investment decisions you're making.

And you're wondering, where do I go to do that? I mean, I could seek out an advisor, but what are even those mutual fund families or investment companies offering exchange-traded funds that actually do this, that offer faith-based investments that align with my Christian values? Well, there's a great new tool by the Eventide Center for Faith and Investing that really approaches this whole idea of investing in beautiful. But at the end of the free resource is a comprehensive listing of the mutual fund families and exchange-traded funds that really are faith-based in their approach. And so if you're looking to explore these mutual fund companies and learn more about how you can invest in a way that aligns with your values, I'd encourage you to download it. It's free. You'll find it at faithandinvesting.com forward slash faithfi. That's faithandinvesting.com forward slash faithfi.

We'd encourage you to download it today. All right, let's head back to the phones to Chesterfield, Indiana. Hi, Richard. Go right ahead, sir. Hi, this is Richard.

Yes, I had a pretty simple question. Just need some wisdom on what I should do. I have no debt except for my house and I paid it down to about $10,000. Now that happened during my time while I was still working. And now I'm retired. And like I say, debt-free, so I just pay utilities and the house note. And I'm just curious, I've got a little nest egg of 140,000 sitting in the IRA. And I'm wondering, should I pay the house off? Would it be wise to pay it off and stop paying interest on the 10,000, which, you know, my home payments are really not high, but it will take two, three years more to pay it off. So would it be wiser to go ahead and just take that money out of my IRA and pay it off?

You know, I think you could go either direction on this, Richard. And I can understand with just 10,000 kind of hanging out there, you're probably like, why wait three years to get this knocked off? I could add, you know, maybe $350 a month back to my budget and own my home free and clear. And so I think that would be the reason to do it. Let me ask you this, though, that roughly 140,000 that's in the IRA, are you already pulling from that now to basically make this payment? No. Well, I would to pay the house off. I'm retired, like I say, but I don't, otherwise I don't touch it.

I mean, I actually add to it. Okay, so you already have other income sources that covers your bills, including the mortgage payment. Yeah. Oh, yeah. Got it.

Okay, great. And then my next question would just be, has that portfolio seen a dip in the last year, like everybody else's? Is it down quite a bit?

Well, you know what, I was wise enough to realize, I think the Holy Spirit told me, get your money out of the market. So I just have it sitting in a money market and it makes about $500 a month dividends. Okay, got it.

It just sits and rides. Okay. Yeah. So you're probably making a little bit more right now in money market.

That won't be the case in the future, probably. You're probably making a little bit more even than the interest you're paying on the mortgage. And so, you know, you're really covering yourself with just what you're, you know, throwing off an interest back into that portfolio right now. But I think, you know, I like the idea of you just going ahead and wiping it out, getting rid of that mortgage, being free and clear. You'd add $10,000 to your taxable income for 2023, but I don't see any reason why you wouldn't just go ahead and do that. I mean, the only other approach would just be if you said, you know what, I want to just let that money sit. I don't want to create a taxable event or, you know, I like the fact that I'm earning maybe four and a half percent right now in the money market. And so if you've got a surplus, which it sounds like you did, you know, on a monthly basis, just based on your other retirement income sources, the other option would just be to accelerate the payoff beyond the, you know, $340 a month that you've got to pay to the mortgage. You know, you add several hundred to it, whatever you have available, and then you cut that three-year payback into a year, year and a half, something like that. But apart from that, I think there's nothing wrong with just pulling that $10,000 out, paying the tax on it and wiping it out. And now you own your home.

I love that idea. I've never owned a home, so this would be wonderful. But then, you know, and I don't pay any taxes because my Social Security is low enough that it doesn't create a tax problem for me. But, you know, as far as that goes, I really am in no problems there whatsoever. So I like the idea of paying it off, but I just wanted some wisdom from someone else, you know, that they are wiser than me. You know what to do?

Well, I don't know about that, but I do like the idea. And I think just even hearing that little bit of exuberation in your voice, Richard, at the thought of owning for the first time your home free and clear, that was enough for me to say that's absolutely the right way for you to go. Here's the thing. I've been doing this a long time, and I've never had somebody call me after they paid off their house, whether it's a month or, you know, 10 years and say, Rob, I paid off the house and I just wish I wouldn't have done that.

I've never gotten that call, Richard. So I'm pretty sure that you're going to be thrilled that you own this home. You're never going to regret it. And so I would say you go for it. All right. Yes.

And can I ask you one other thing? Yes, sir. Is there anything I need to do once I pay it off as far as the title or, you know, do I need to go and register that or I don't, you know, I don't know. I've never done it before.

So I, you know, it's a new, a new God has just been so good and I can't say that enough. That's incredible. No, you know, they would, there'd be a discharge of mortgage letter that would need to go to the county, but your mortgage company should send all the required documents to your county clerk's office notifying that your home is no longer bound by a mortgage. You may want to follow up on that just to make sure that everything's been reported properly. And then if there's any money left in escrow, the lender will send that back to you.

But that should all happen automatically. You'll get a canceled promissory note and an updated deed of trust and a certificate of satisfaction on that mortgage. And then all that'll be sent to the county office and and then you're good to go, my friend. Oh my goodness, that just sounds wonderful. So I'll just put that title deed and hit the ball with the rest of the important papers.

I like the idea. All right. Hey, listen, thanks for being a part of the program, sir. You're a joy to talk to and may God bless you. If we can help you in the future, don't hesitate to give us a call back.

800-525-7000. You know, we've got to take a break here in just a moment. Boy, what a joy to hear just the joy in his voice as he thinks about his next step in paying off this mortgage. That's great. Speaking of mortgages, you know, we have wanted here at Faith and Finance Live for a long, long time to have a mortgage partner, an underwriter that we trusted that really shared our values as believers that had a national footprint that could serve you in the area of mortgages. And we found that with our underwriter Movement Mortgage.

If you want to learn more about Movement Mortgage and all that they offer, you can do that on their website at movement.com forward slash faith five that's movement.com forward slash actually forward slash faith movement.com forward slash faith. We're going to introduce you to Casey Crawford, the owner of that in the weeks ahead. You'll be delighted to hear his vision and the heart behind it and the ministry that they're doing. We're going to take a quick break back with our final segment just around the corner. Stay with us.

Back to Faith and Finance Live. I'm Rob West. We're taking your calls and questions today.

Eight hundred five to five seven thousand. We've got one line open. Let's head back to the phones to Akron, Ohio. Hi, Carlene. Go right ahead.

Hi. We have twenty five thousand dollars of an emergency fund that we're still working on, but we don't want to leave it sitting in a savings account. It is in the savings account that we appreciate being in through our college that we went to and they use it to build churches and such.

And it's been a long time as we build that money. However, we're looking at retirement money down the road and just kind of rearranging things. So our question is, we'd like to move it into a high yield interest savings or a no penalty CD where we can remove it, you know, take it out if we need an emergency. Do you have any recommendations on one or the other or if CDs or the high yield interest savings?

Are online banks OK? We've never done that, but that's what we're looking at literally this afternoon. Nice. Yeah, great. I like that option a lot.

Carlene, I would make sure it stays liquid. So whether it's a high yield savings account or a no penalty CD, you could go either direction. I think probably just an online savings account would be good. As long as there is FDIC insurance, I'd be fine with that.

You can look at their rating. One of the best websites just to look at who has the various, you know, rates and terms right now that are most competitive is bankrate.com. That's bankrate.com. And you could go in there and sort, you know, by CD or by savings account and find the one that's the best fit for you.

You will find that marcus.com, which is the retail operation of Goldman Sachs. They typically have some of the best rates around with the backing of Goldman Sachs FDIC insurance, which I think is really the key. So, for instance, right now they're paying three and three quarters percent on their high yield savings account. No fees, no minimum deposits, you know, same-day transfers to other banks, great customer service. You know, it's just no reason for your savings account to have it, in my view, at a brick and mortar bank when you can have an online savings, link it to your brick and mortar checking account, and then move money back and forth, not pay any fees, and get, you know, four times the national average or better on your savings rate.

So I'd probably look at that one. You could look at any others that come up at bankrate.com, and I think those would be great choices for you for this. What about the interest, like the high yield interest savings, does the interest rate go up and down on that as opposed to in a CD where it stays the same? Is there advantage to keeping in a CD like a no penalty withdrawal CDE for that reason? Yeah, potentially. I think you just need to look at what is the rate being offered at those in those no penalty CDs.

I haven't looked at them recently, so if you could get one where you could lock it in. Now, I think these rates are going to continue to head higher for now. Now, at some point, they're going to level off, and then, of course, they'll turn down. So these online savings accounts, just like any savings account, those rates are going to fluctuate with the fed funds rate. So, you know, we'll probably top out somewhere around four percent, and then probably later this year or into next year, they'll start to head down. So if you could find something comparable with a no penalty CD that would allow you to lock something in, but still have the liquidity, then I think that would be great.

I mean, you're going to get to your money a little quicker with one of these high-yield savings where you've got it linked up and you can do same-day transfers to and from other banks, but, you know, you still should, with everything being done electronically with a penalty-free CD, be able to get to the money fairly quickly. And if you could extend out that kind of guaranteed rate for a longer period of time and not have any breakage fees, then obviously that would be great because I think we're even though we're probably not at the top, we're getting close to it. So I think you could be confident that you're not giving up a whole lot by locking it in.

Does that make sense? Yeah, that's great. No, I really appreciate that. Thank you so much for taking the call. Yeah, happy to.

Bankrate.com or NerdWallet.com would be a great place for you to kind of do some digging on all of these bank products. But appreciate your call today, Carleen. God bless you.

To Tampa. Hi, Pat. Go right ahead. Hey, how you doing?

You missed me last week. I was waiting. Okay, so I'll make it as quick as I can.

Sure. So I have roughly $12,000 to $15,000 in credit card debt. I do have a 457 with about $60,000 in it, but I've got a retirement plan about it that I would like to leave it alone if possible. I also have a 401k that I just took about. It was not a long term one that I just started about three years ago. I took $8,000 out of that and have about $7,000 left.

It lost 6% over the last two quarters. I'm earning negative 0.132% on it right now. So I took it out to pay credit cards. My question is, and I also have a second mortgage of $45,000. I owe less. I owed about 80 on my house and I have significant equity in the house. I just don't want to take a loan based on today's rates. So I'm looking for good advice about which way to go in the next six months with this.

Yeah, here's where I'd go with this. Even if the rates were lower, I would encourage you not to put this on the house and refinance. Number one, you've probably got to, even with that first and the second, you've probably got a fairly attractive interest rate if you've had those for a while. Number two, those loans are secured to the property.

If you don't pay, you lose your house. With the credit cards, that's unsecured debt. The biggest issue that I run into, and we talked about this with an earlier caller, Pat, and that is that so often credit card debt is just because of overspending, having habits that allow you to spend beyond your means. And usually when you take the pressure off of the credit cards by repaying it with new debt, even at lower interest rates, you do a couple of things. You extend out that repayment period in many cases. But even if you don't, you don't correct the problem that got you in the first place.

You treat the symptom and not the problem. And then eventually the credit card debt comes back, but now it's on top of that new loan, whether that's a refinance mortgage or a consolidation loan of some kind. So I'd probably leave those two mortgages right where they are and let's make the goal, getting that paid off once and for all at some point before retirement so you own your home free and clear.

I'd leave the 457 and the 401k right where they are, let those continue to grow, get those invested in a way that makes sense so you can take advantage of the market recovery when it happens. And then finally for the credit card debt, which is the big question I know that you have, I'd use a credit counseling program. So this is basically a nonprofit debt management agency where the accounts would be closed through the debt management agency. The interest rates would be lowered. You'd have one level monthly payment that you'd pay through them, routed to the credit card company so the debt stays right where it is. But with the combination of that level payment, which in effect snowballs it, plus the reduced interest rates, much lower than probably where they are today, you're going to pay this debt off 80% faster. But the big idea is what I said earlier and that is because it's going to take a little time, you'll do the hard work of getting it paid off and usually it can help to forge new habits so that once that debt's paid off, we don't ever go back there again because really I need you to work on your spending plan and make sure that you're living within your means. So when this debt is eradicated, now we can take that surplus and just build emergency funds and eventually longer-term retirement assets. But I would use christiancreditcounselors.org.

That's my preferred option for how you get out of credit card debt if you have more than $4,000. Pat, thanks for your call today my friend. We appreciate you checking in with us. Quickly to Indiana. Hi Karen, go right ahead.

Hi, thanks for taking my call. I was just wondering if the insurance that insures your funds up to $250,000 in credit unions, is that as good as FDIC? It absolutely is, yes. So both the National Credit Union Administration, the NCUA, and the FDIC, the Federal Deposit Insurance Corporation, are both responsible for insuring funds in the event that a financial institution fails. They're both backed by the full faith and credit of the United States government. It just so happens that the NCUA is what insures the credit union and the FDIC is what insures the banks.

But they both have the same limits and they both have the U.S. government backing. Okay, okay, well thank you. I was having trouble getting information about that, so thank you very much. You're welcome, very good. Thanks for your call to Pennsylvania. Hi Yvonne, how can I help you?

Hi, yeah, thanks for taking my call. I used to listen a long time ago with Larry Burkett when I was teaching and had this time period free. Now it's harder because of my job, but yeah, I remember Larry. Well, I'll tell you there's not a week that goes by that somebody doesn't mention Larry. He's had an amazing impact on millions, but I've only got about a minute and a half left, Yvonne.

How can I help you? Oh gosh, so my husband died recently and I have about $42,000 of his life insurance and another $21,000 of his Roth IRA. I'm 64 years old and a year ago we refinanced our mortgage so that our home equity line of credit would get, it was variable, so it wouldn't be variable and take advantage of those low interest rates.

It's about $106,000 balance at 3.65% interest and I'm wondering if I should take that money and pay down my mortgage. My original goal, I took a second job so that we could get our mortgage paid off by the time I was 70 so that I could retire and now that he's gone, I need that extra income to live. Yes, yes. Wow, I totally understand. So let me just make sure I understand and I'm so sorry to hear about your husband's passing, Yvonne. You have currently the mortgage balance is at $100,000 and the inheritance that you got, the total of it is what, about $40,000? Is that right? Yeah, it's about $40,000, $42,000.

There's another $5,000 in an annuity and well, well no, it's, it's, but no, there's $71,000 altogether because the Roth IRA is $21,000. Okay, alright, let's do this. I want to give you plenty of time to kind of talk this through. I don't want to rush it because I know this is something that's a big deal to you and it should be and so let's do this. You stay on the line. I'm going to have my team get your information and I'll get back in touch with you and we'll talk this through.

I think, you know, we could go a couple of directions here and I just want to understand a little bit more where you're at and then we'll decide where you go from here. Thanks for your call, Yvonne, and God bless you. Well, that's going to do it for us today, folks. On behalf of my team, Amy, Gabby, Robert, and Dan, I'm Rob West. Faith and Finance Live is a partnership between Mooney Radio and Faith Five. We'll see you tomorrow.