|
|||||||
 |
|
|
Thread Tools | Search this Thread | Display Modes |
07-29-2008, 04:51 PM
|
#1 |
|
Registered User
Join Date: Jul 2008
Posts: 1
|
Pay off second mortgage or put in savings?
I have a $9,600 second mortgage at a fixed 6.0%. I also have about 40k in savings that is only earning 3.75% (savings account). I know it is important to build equity/savings, however, given the discrepancy in rates should I just take out $9,600 from savings to pay off the 6.0% loan? I do realize that homeowner tax breaks result in my second mortgage technically being less than 6% (while compound interest on my savings also plays a role). I have heard that if the interest rates are comparable that it is best to leave in savings in order to build wealth. My first mortgage is $150k and is fixed at 4.25% for 5 more years, so I would hope to start paying that down, if possible. Thanks for any feedback.
|
|
|
|
07-30-2008, 02:51 PM
|
#2 |
|
Registered User
Join Date: Mar 2007
Location: Ohio
Posts: 324
|
I would pay down the 2nd mortgage- the interest you earn is getting taxed, so the deduction you get really is not that effective all things considered.
__________________
Light is faster than sound. That is why some people appear bright until you hear them speak. |
|
|
|
|
07-30-2008, 04:54 PM
|
#3 |
|
Registered User
Join Date: Jul 2008
Posts: 46
|
I would also pay off the second mortgage in your situation.
|
|
|
|
|
08-27-2008, 12:08 PM
|
#4 |
|
Registered User
Join Date: Aug 2008
Posts: 2
|
Bay Area...similar situation
I have a similar question, only in the Bay Area.
I have a 1st mortgage of 415,000 at 5.625% and a 2nd mortgage of 75,000 at 8.025%. If my wife and I were to pay extra to either loan, either a little bit extra each month or as a lump sun (we currently pay an extra $50/month on each towards principle)...which loan should we pay down first? Higher interest or bigger loan? Thanks  |
|
|
|
|
08-27-2008, 12:12 PM
|
#5 |
|
Registered User
Join Date: Aug 2008
Posts: 2
|
Oh, and both are 30 year fixed with no pre-payment penalty...
|
|
|
|
|
08-27-2008, 12:55 PM
|
#6 |
|
No Disclaimer Necessary
Join Date: Feb 2005
Posts: 1,772
|
Higher interest.
__________________
"A nickel ain't worth a dime anymore." - Yogi Berra |
|
|
|
|
«
Previous Thread
|
Next Thread
»
| Thread Tools | Search this Thread |
| Display Modes | |
Linear Mode
|
|
Similar Threads
|
||||
| Thread | Thread Starter | Forum | Replies | Last Post |
| Which Mortgage Is Right For You? | tanish | Home and Real Estate | 1 | 12-26-2007 03:49 PM |
| Mortgage Application Online | parlakawong | Home and Real Estate | 0 | 10-01-2007 10:08 AM |
| how long should I wait to refinance? | rn123456789 | Home and Real Estate | 4 | 09-29-2006 08:54 PM |
| 401(k), Roth IRA, Mortgage, Savings -- So many choices! | festicola | RETIREMENT | 3 | 05-03-2005 02:14 PM |
| Loan max for mortgage or hold onto savings? | marjulnic | Home and Real Estate | 0 | 01-26-2005 12:46 PM |
SPONSORED LINKS
Powered by: vBulletin Version 3.0.1
Copyright ©2000 - 2009, Jelsoft Enterprises Ltd.
Copyright ©2000 - 2009, Jelsoft Enterprises Ltd.