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11-12-2008, 10:29 AM
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#1 |
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Registered User
Join Date: Nov 2008
Posts: 2
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Payoff Mortgage or Student Loans??
Hello everyone. I'm trying to figure out if it would be best to pay additional on my mortgage or student loans. Here's the situation:
$245K mortgage @ 6.5%. Value appx $250K (yes, 0 down so appx $120/mo PMI) $32K student loan @ 2.375%. I have NO problem paying the mortgage or student loans. My dilemma is wanting to move from MN to MO soon, but in a down market owing 100% on a house makes it difficult. I have about $1,000 per mo in discretionary income AFTER getting the max match in my 401(k). Obviously that can make a serious dent in the mortgage in the next yr or so, but not so much in the student loans...plus you don't get that warm, fuzzy feeling paying down student loans. My thought is the student loans will be there regardless of if I move or not, but the house is a real road block and to be honest, I probably should have waited and saved up a down payment. What do you think? Appreciate the advice. DS |
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11-23-2008, 09:16 PM
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#2 |
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Registered User
Join Date: May 2008
Location: MI. (USA)
Posts: 27
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Plain and simple.
Your home is a investment,your student loans are not. Any other questions?
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You cant win the Kentucky Derby on a donkey |
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11-24-2008, 08:45 AM
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#3 |
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Harold Hecuba Productions
Join Date: Sep 2004
Location: New Berlin, Illinois
Posts: 934
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You're right, you probably should wait and save up a down payment. Given today's rates of return on savings accounts, under normal circumstances it probably is in your better interest to pay the extra on your mortgage to build up equity. But where you're planning to sell the house within the next year, it may make more sense to put the extra in a savings account for the down payment on another home. But I would not purchase a new home until you've sold the old one - too many folks are playing that game these days and getting burned...
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11-25-2008, 11:35 AM
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#4 |
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Registered User
Join Date: Nov 2008
Posts: 2
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What would be the benefit to putting money in savings vs. putting on the mortgage? I guess I'm looking at like this: if I don't put extra on the house, odds are I'll still be upside down in it next year. So the savings will just go to paying off the balance when it sells, right? My thought was I would make more progress and eliminate some interest by putting it on the house now, vs. when I sell. Thanks for the reply!
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12-03-2008, 07:18 PM
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#5 |
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Registered User
Join Date: Jul 2008
Location: Florida
Posts: 19
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Pay down your mortgage
Look at the interest rates, that should be your math, paying off your mortgage saves more money then paying down the student loans
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