Which debt to pay off first?
Date: Sun, 06/13/2010 - 17:10
Here's what i owe:
Mortgage: 15 year fixed 5.875% rate= $120k remaining (original loan 130k, 13.4 years left)
Student Loan: 30 year 4.75% rate=21k remaining (original loan 90k, 27 years left)
Car 1: 5 year 3.85% rate=31k remaining (original loan 32k, 58 months remaining)
Car 2: 4 year 2.90% rate=9k remaining (original loan 25k, 19 months remaining)
I finished school about 3 years ago and have been very aggressive in paying off my student loans. However, should i be aggressively be paying down my mortgage since the rate is the highest? Common sense would tell me yes, but self fullfillment would be for me to pay off my student loans first. What do you think?
Thanks for your advice![/LEFT][/FONT][/COLOR]
if I were you, I would sell both the cars and will not pay 40k p
if I were you, I would sell both the cars and will not pay 40k plus interest on it. I will buy two (assuming you need two cars: one for you and one for your spouse) used and reliable cars. After that, once I have enough emergency savings for 6-8 months (including your 15k) I will pay as much money as I can towards my mortgage because I am paying higher interest on it.
I asked you in a PM to remove your signature due to the rules, you said that you would but I see you haven't, remove your advertising from your signature.
Since cars are a depreciating asset and home mortgage interest i
Since cars are a depreciating asset and home mortgage interest is a deduction for taxes, I would concentrate on paying off the cars. I would probably pay off car 2 and apply the remainder to car 1.
I also agree that you should save up an emergency fund if you don't already have one before doing this. But get the debt off the assets that are depreciating first. Then do the student loans and then the mortgages.
