What would you pay first? Mortage or Student Loans?

GreenSpottedPuffer · #1 01-29-2009, 10:41 PM

I have decided to take my money out of investments and pay off some debt...I am going to talk to my personal banker but just thought for the heck of it, I would ask what you guys think

Student loans or mortgage?

My student loans are ongoing...like five years now. I paid a large chunk in the beginning and have worked it down from $35 000 to $21 000 or so. I have to get the exact numbers from my investments but I think I could pay 2/3 of that off. Interest is...hmmm...so bad but I don't know. Something like 6 % or so?

My mortgage is new but my parents paid a huge downpayment on our condo. So its about $200 000 now. Would have been double if my parents didn't believe in spending money on their kids while they were still around instead of leaving it for us when they are gone

Anyways, mortgage is so much more that I figure putting like $14 000 into it is kind of pointless...in the sense that I won't see much of a difference right away

I am kind of leaning towards my student loans so that I actually see them disappearing and I am not paying all that interest but we also plan to be mortgage free in 5 years for this place, so...a bigger payment now would help a bit. Hmmmm....

Also 100% of my fiances salary already goes to the mortgage every month.

Tom R · #2 01-29-2009, 10:44 PM

What has the highest interest rate? That is the one you should pay down.

Tom R

ElGuappo · #3 01-29-2009, 10:45 PM

IMO it would all come down to the interest rate. which one would save you more money by paying down??

How did you post before me?????? man quick fingers.

GreenSpottedPuffer · #4 01-29-2009, 10:46 PM

Quote:

Originally Posted by Tom R

What has the highest interest rate? That is the one you should pay down.

Tom R

Yeah your right...I think its the student loans but like I said, I don't even know for sure what it is. I said 6% but actually I am pretty sure its higher. Its really bad that I don't know the interest rate

GreenSpottedPuffer · #5 01-29-2009, 10:48 PM

Quote:

Originally Posted by ElGuappo

IMO it would all come down to the interest rate. which one would save you more money by paying down??

How did you post before me?????? man quick fingers.

I think the student loans.

You guys are right.

I actually just want these stupid student loans GONE anyways. Seems like its been so long since I was in school yet I am still paying for it.

Man it would be nice to just use the $14 000 or so on Reef stuff

But not a cent is going to this hobby...

ElGuappo · #6 01-29-2009, 10:53 PM

i just did the same thing with my 22% visa

GreenSpottedPuffer · #7 01-29-2009, 10:55 PM

Quote:

Originally Posted by ElGuappo

i just did the same thing with my 22% visa

Yeah if I had credit card debt, that would be first to go!

I just got a credit card though not too long ago to get a credit rating before I could get my condo. So far I have just paid the balance at the end of each month.

ElGuappo · #8 01-29-2009, 10:59 PM

te best way to gain a credit raating (according to my buddy who worked for ING) is to carry a small ballance and make your monthely min payments. carry a ballence of like 200 and you monthely payment will be like 35 bucks. as long as you are making this payment on time every time this will really help your rating. it shows you are capible of not only carrying a balance but also capible of making your payments without issues. just be aware of unwanted credit limit raises.

mseepman · #9 01-29-2009, 11:02 PM

I would look at it this way. If you pay off most of the Student loans...you are closer to completely eliminating that payment. Once it is gone, you can then use that money to accelerate your mortgage payment or provide a buffer if times get rough.

GreenSpottedPuffer · #10 01-29-2009, 11:22 PM

Quote:

Originally Posted by mseepman

I would look at it this way. If you pay off most of the Student loans...you are closer to completely eliminating that payment. Once it is gone, you can then use that money to accelerate your mortgage payment or provide a buffer if times get rough.

Good point. Thats kind of how I am looking at it.

Funny you mention a buffer...my fiance just informed me that $5000 of this money is going into one of those new non taxed savings accounts for "rough times".