save or pay extra mortgage?

[contrary1]

Re: save or pay extra mortgage?

Gads, I feel blessed my mortgage isn't that high! I agree, I would start chipping away using your Option B, clearing out the highest interest rate account first.
Let us know which you choose & then keep posting so we can see your progress..........

[CJsoccerchic]

Re: save or pay extra mortgage?

WOW - almost $4,000 per month on mortgagaes..... yikes.
Personally, I would put the $500 to the higher interest mortgage. Get that mortgage paid off before the 15years, then turn around and pay the extra $500 to mortgage #1. Do this only if you already have a good nest egg for a good couple of months because you gotta be able to cover expenses should one of you get disabled and cannot work, or whatnot. Once you got a good nest egg, then pay extra to the mortgages! Hope that helps!

[coffeebreak]

Re: save or pay extra mortgage?

I would go with Option B because it has the highest interest rate. If you owe on credit cards, use it to pay off those for the same reason; high interest rates. Pay the debts/credit cards with the highest interest rate first.

I thought that $511,000.00 was incorrect for Mortgage #2. The new amount looks better.

[Aldeya]

Re: save or pay extra mortgage?

It depends on what is important to you.

Me and my hubby decided that a piece of mind of owning our house is more important to us than trying to invest the "extra mortgage" money.

If you calculate the interest you will save for the life of the mortgage it will give you a tremendous return on your money.

We still have a few years to go but we calculated we already saved THOUSANDS of dollars in interest that we did not have to pay to the mortgage company.

Whatever happens we know we will have a roof over our heads. To us this piece of mind is very important.

[pinkeyy501]

We bought our first house last summer and currently have 2 mortgages for this house. I would like to put extra $500 into either savings or to pay principal for our mortgage. I think it's a better deal for us to paying extra principal towards our mortgage than to put $500 monthly into savings or CD account. If I am correct, which mortgage should I put the $500 on? So far, we've been only making the minimum payment on the both mortgages. Here's the breakdown on our mortgage:

<B>Mortgage one</B> - 30 yr fixed
Monthly minimum payment - $3,054.70
Principal Balance on 3/14/06 - $511,567.71
Interest rate - 5.875%

<B>Mortgage two </B>- 15 yr fixed
Monthly minimum payment - $850.12
Principal Balance on 2/1/06 - $93,772.42
Interest rate - 6.625%

Which is best??
<B>Option A: </B>Pay $500 to Mortgage one principal (big loan)
<B>Option B: </B>Pay $500 to Mortgage two principal (small loan)
<B>Option C: </B>Pay $250 to Mortgage one AND pay $250 to Mortgage two
<B>Option D: </B>Put extra $500 into savings or CD account

We would appreciate your input.

Thank you!

- pinkeyy501