Our Financial Picture

[Jluke]

15 year loan at 3.25% equals a mortgage payment of 1292.91 plus Taxes and Insurance

total interest paid is $48,724 over the life of the loan.

On your current mortgage, not knowing the exact details, if you took 184k at 4.5% today, you would pay 151,628 in interest. You can save almost 100k in interest!

I am only stressing this b/c I did it and it works! You seem to be in a similar financial position as I was so think about it.

I went from a 30yr in 2006 (160k) to a 15 yr in 2008 (age 31) to a 10-yr in 2013 (94k). I will have the house paid off in 3 years (57k left). Overall will have paid it off in 12 years.

Does the above put the interest from the car loan into perspective?

[snafu]

Since you asked for opinions...I really like Jlike's suggestion to create an amortization schedule for all loans/credit decisions going forward.

I've no idea where you are in your mortgage time line but in the early years what percentage goes to interest and how much reduces principal? I recall looking at the amotorization schedule that accompanied the papers on our house and feeling horrid about the amount paid in interest during the 1st decade. We opted to pay something extra directly to principal every month. While interest rates were higher, back in those days, we surprised ourselves by clearing the mortgage in 13 years rather than 30 years. From that point onward the sum that had been 'mortgage' [less ongoing property tax & insurance] went to an investment portfolio.

To maintain the most flexibility, avoid costs and hassle factor, I'd maintain the current mortgage and add a sum to be applied directly to the mortgage principal. Several participants here have created a 'snowflake' procedure where extra funds, whatever the source goes directly to mortgage principal. ...merely something to consider.

[cashisking500]

Thank you to everyone for your advice!

[Goldy]

Here is something else to chew on. If you put the hammer down and paid off the car in one year and rolled that 1600 into your mortgage you can pay off your house in 8 years and only spend 34k in interest. This also saves you any refinancing fees and allows you to increase your retirement savings during the whole time.

You are in pretty good shape, focus on increasing your retirment and think about what your finacial goals are.

[scfr]

Overall you seem to be in decent shape!

And now here comes the "but . . ." Let's talk about the car loan. If the balance is $18K, I can't help but wonder what the original purchase price was. It seems like you own a pretty expensive depreciating asset given your income and overall financial fitness. Wouldn't it be lovely if, instead of making that monthly car payment, you were plowing extra money in to retirement savings? Of course that is just a hypothetical question, and you are now "stuck" with the car payment, so what about making extra payments on it and then when it is paid off setting aside some money each month so that the next car purchase is in cash?

You could do that and gradually increase retirement account contributions at the same time.

[cashisking500]

Thanks scfr. I agree, would be great to get through the car loan quickly and then save up cash for our next car purchase.