View Single Post
  #6 (permalink)  
Old 03-31-2006, 08:47 PM
mbhunter mbhunter is offline
$ Saving HS Freshman
 
Join Date: May 2004
Location: Virginia
Posts: 106
Points: 990.00
Donate
Default Re: save or pay extra mortgage?

Wow! You live in CA?

It's a good thing that you understand the value of paying your mortgage down faster.

One question: Do you have an emergency fund? As in a good 6 months' of expenses in something liquid (like a money market, cash, etc.)? If not, you might consider building that up to something reasonable before adding payments toward your principal. You'll want the emergency fund there because it's a lot more difficult to pull money out of your house if you actually need it!

If you already have an emergency fund, I'd try to knock down the higher-rate payment first because you'll "earn" 6 5/8% (minus any lost tax deduction) in saved interest for the extra amount you put toward principal on that loan. Then, after the first loan is paid off, you can throw that whole payment at the bigger loan.
Reply With Quote