Here's another Q&A Thursday! For new readers, Q&A Thursday is an opportunity for you to submit your questions anonymously that I'll answer every week. I post 4 questions every week, but no one hasn't gotten their question answered.
Let's see what this week has:
Q1. Should I apply for a loan modification or just walk away from my house?
A. That is a loaded question to ask without a lot of information. First and foremost, do you want to stay in the house? If you love your house and the payments have just gotten unmanageable, then apply for a loan modification. Be warned, they are a lot of work. But they are worth it, usually cutting your interest rate down by at least 2% if you're still at an interest rate from the height of the market. If you want out of your house, it is best if you start the process of a loan modification and start quietly shopping for another place to live. It will be difficult for you to get credit once you walk away so have housing lined up already. Also, I've heard mixed things about people's ability to get another home loan in this situation. Some people have no problem getting approved for another mortgage, others can't. As long as you're up on your payments, then you should be able to get some kind of financing. However, if you're behind on your payments it could be trickier.
Hope that helps! Email me if you want more one-on-one advice.
Q2. My parents put me on their credit cards when I was younger to help me build my credit. Should I continue to stay on their cards or should I get off them?
A. Funny you should ask, I'm dealing with a similar quandary right now. Your credit is tied to your parents through these cards. As is theirs to you. How all three of you use this card can affect everyone's credit. If your parents are able to use credit cards responsibly and tend to keep their debt to a minimum, stay on it. If you're the irresponsible one with this card, then you should get off it for your parents' sake, unless they're totally fine with you messing with their credit.
Q3. Should I keep a credit card that I have had since 1999 (to build good credit rating) even though I never use it and It has a $40 annual fee?
A. If you aren't using it, then no. Revolving credit, which is what credit cards are, that goes unused can actually lower your credit score. So if you truly aren't using it, cancel it. Your credit score may take a hit of a few points, but it won't be noticeable and will build up again in a matter of months as long as you make your other credit payments on time.
Q4. Hey, Verhanika. Here's a non-financial question for you: I know you've got your new house now. What colors are you planning on painting it and how did you choose your palette?
A. I love this question. I am so in love with paint and colors, though you'd never know if from my stage manger gray and black wardrobe. Andy and I are in love with everything about the Pacific Northwest so we chose colors we could find in the area that are super earthy. Our living room will be a sage green, the bedroom slate blue with a gray ceiling, and our dining room and kitchen will be a slightly brownish red. No color yet for the office.
My favorite new website for picking palettes is Design Seeds. Take a look around to find ideas for your next paint project.
That's it for this week! Submit your question here for it to appear next week!
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