Ask Liz Weston

Get smart with your money

refinance

This week’s money news

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This week’s top story: Lousy customer service ‘designed for you to give up.’ In other news: What home shoppers need to know about the new buyer’s contracts, weekly mortgage rates tumble, and how to get your finances back on track for fall.

Biden Official: Lousy Customer Service ‘Designed For You to Give Up’
New government actions target “doom loop” customer service calls, fake reviews and subscription cancellations.

What Home Shoppers Need to Know About the New Buyer’s Contracts
Starting Aug. 17, home buyers will set their agents’ commissions and negotiate who will pay.

Weekly Mortgage Rates Tumble; Should You Refinance?
The rapid decrease is likely to set off a wave of refinancing.

How to Get Your Finances Back on Track for Fall
Reviewing spending and preparing for big expenses can help your budget recover from summertime.

Q&A: Refinance or use IRA funds on mortgage?

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Dear Liz: I owe $360,000 on my mortgage. I have sufficient funds in my IRA to pay this amount off without depleting income distribution for the next 20 years. I am currently paying $1,100 monthly on an interest-only loan, but I have to start making much larger principal payments in November 2022. Would you advise withdrawing IRA investment monies (and taking a tax hit) to pay off the full loan amount, or simply getting a conventional mortgage and live with a higher payment ($1,500) each month? I am 77 and retired now for four years.

Answer: Making that large a withdrawal will almost certainly hurl you into a much higher tax bracket and increase your Medicare premiums. Refinancing the mortgage while rates are low likely makes the most sense, but consult a tax pro or a fee-only financial advisor before making any big moves with retirement funds.