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Started By
Message
Which loan to pay off first?
Posted on 3/27/15 at 9:12 pm
Posted on 3/27/15 at 9:12 pm
Student loans at about 4.1% or house loan at about 5.2%?
Total loan amounts are comparable.
We plan on selling the house in two years.
I don't think tax write off's factor into this because we are in the high tax bracket and this seems to eliminate most deductions.
Is it as simple as pay off the higher interest loan?
Total loan amounts are comparable.
We plan on selling the house in two years.
I don't think tax write off's factor into this because we are in the high tax bracket and this seems to eliminate most deductions.
Is it as simple as pay off the higher interest loan?
5
Posted on 3/27/15 at 9:18 pm to Stingray
Student loans are forgiven with your death, so there is that
Posted on 3/27/15 at 9:23 pm to Stingray
At what income level is mortgage interest not deductible? You can even deduct that with AMT (if a first mortgage on primary residence).
ETA: Just looked it up and saw that since 2011, the mortgage interest deduction starts getting phased out at moderate income levels. I haven't had a mortgage since then and didn't get the memo. Thanks Obama.
ETA: Just looked it up and saw that since 2011, the mortgage interest deduction starts getting phased out at moderate income levels. I haven't had a mortgage since then and didn't get the memo. Thanks Obama.
This post was edited on 3/27/15 at 9:31 pm
Posted on 3/27/15 at 10:11 pm to Bayou Tiger
1. I would rather not die.
2. Will I end up with more money if I pay the house loan fast while making minimum payments on the student loans, even if I sell in 2 years?
2. Will I end up with more money if I pay the house loan fast while making minimum payments on the student loans, even if I sell in 2 years?
Posted on 3/27/15 at 10:14 pm to Stingray
Paying the student loan is my first thought for a few reasons, but I think the best thing to do would be to pay down the mortgage first. This is because you can tap that equity with a HELOC if you need to. You can't tap the paid off student loans.
Posted on 3/28/15 at 5:29 am to Stingray
Your home will likely increase in value. Why pay off something early that you're making money off of anyway?
Pay down the loans first, then add those extra payments to the new mortgage (assuming you buy again after you sell in two years).
Pay down the loans first, then add those extra payments to the new mortgage (assuming you buy again after you sell in two years).
Posted on 3/28/15 at 6:48 am to TDsngumbo
I'm yet to hear anyone give an actual reason as to why financing a depreciating asset is worse than financing an appreciating asset.
It's like a snake charming preacher said it once to a bunch of people who had blind faith in his word and they went out evangelizing.
It's like a snake charming preacher said it once to a bunch of people who had blind faith in his word and they went out evangelizing.
This post was edited on 3/28/15 at 6:49 am
Posted on 3/28/15 at 7:10 am to TheHiddenFlask
quote:
I'm yet to hear anyone give an actual reason as to why financing a depreciating asset is worse than financing an appreciating asset.
Yup... I get sick of that mantra
What the frick does it matter if you're financing or not... That isn't going to to effect its depreciation one way or the other.
Posted on 3/28/15 at 7:35 am to Lsut81
B/c Dave said so. That's why.
Posted on 3/28/15 at 10:27 am to TDsngumbo
quote:
Your home will likely increase in value. Why pay off something early that you're making money off of anyway?
One has nothing to do with the other. The house will increase in value at the same rate regardless of the amount owed on it.
Posted on 3/28/15 at 10:51 am to iknowmorethanyou
quote:
B/c Dave said so. That's why.
The guy whos whole mantra is spewing common sense financial advice to morons
Posted on 3/28/15 at 3:11 pm to TheHiddenFlask
Thanks for the advice but I doubt I will need a HELOC
Posted on 3/28/15 at 3:53 pm to Stingray
The house note is still the higher interest rate. He HELOC option is just gravy.
Posted on 3/28/15 at 4:17 pm to Lsut81
He made a career off of evangelizing financially conservative principles mixed with psychological methods that work for people who have no basic concept of finance.
His mantra is debt free living.
I know a lot of people worth tens of millions of dollars that started with almost nothing. I don't know any of them that didn't use debt to get there. The key is what you do with the cash from the debt. A jacked up F-250 is an expense. A piece of equipment is an investment.
If you finance a reasonable vehicle and use that money to buy a oiece of equipment, that is no different than financing the equipment. That is the thing that his message misses. There is no good debt or bad debt. There are only good and bad spending choices.
His mantra is debt free living.
I know a lot of people worth tens of millions of dollars that started with almost nothing. I don't know any of them that didn't use debt to get there. The key is what you do with the cash from the debt. A jacked up F-250 is an expense. A piece of equipment is an investment.
If you finance a reasonable vehicle and use that money to buy a oiece of equipment, that is no different than financing the equipment. That is the thing that his message misses. There is no good debt or bad debt. There are only good and bad spending choices.
Posted on 3/28/15 at 4:26 pm to Lsut81
He made a career off of evangelizing financially conservative principles mixed with psychological methods that work for people who have no basic concept of finance.
His mantra is debt free living.
I know a lot of people worth tens of millions of dollars that started with almost nothing. I don't know any of them that didn't use debt to get there. The key is what you do with the cash from the debt. A jacked up F-250 is an expense. A piece of equipment is an investment.
If you finance a reasonable vehicle and use that money to buy a oiece of equipment, that is no different than financing the equipment. That is the thing that his message misses. There is no good debt or bad debt. There are only good and bad spending choices.
His mantra is debt free living.
I know a lot of people worth tens of millions of dollars that started with almost nothing. I don't know any of them that didn't use debt to get there. The key is what you do with the cash from the debt. A jacked up F-250 is an expense. A piece of equipment is an investment.
If you finance a reasonable vehicle and use that money to buy a oiece of equipment, that is no different than financing the equipment. That is the thing that his message misses. There is no good debt or bad debt. There are only good and bad spending choices.
Posted on 3/28/15 at 4:58 pm to Stingray
If you are selling the house why not go after the student loans?
You can at least write off your mortgage interest and then it's come close in your interest comparison.
In two years your credit may change and interest rates may change.
You can at least write off your mortgage interest and then it's come close in your interest comparison.
In two years your credit may change and interest rates may change.
Posted on 3/28/15 at 8:01 pm to Stingray
Why are you paying 5.2% interest on a mortgage - arm rates are hovering around 3%
Posted on 3/28/15 at 8:24 pm to swanny297
quote:
Why are you paying 5.2% interest on a mortgage - arm rates are hovering around 3%
It was a special < 20% down payment but no PMI loan. When I considered refinancing about a year ago, I would have had to get PMI, so it was not worth it. And now that I will sell in 2 years, I don't think it makes sense to pay refinancing fees to get a lower rate for just 2 years.
Posted on 3/28/15 at 8:35 pm to Stingray
quote:
When I considered refinancing about a year ago, I would have had to get PMI
I'd say pay down the mortgage so hopefully you won't need PMI on your next house. Also when you sell your house to buy a new one you'll have more equity and won't have to get as large of a mortgage in two years when interest rates are presumably higher than they are now.
Posted on 3/28/15 at 8:39 pm to yellowhammer2098
My next home will be 20% down, 15 year loan, don't worry.
Keep
Calm
and
frick
Shitty Loans
Keep
Calm
and
frick
Shitty Loans
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