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Should we pay extra into our Home Mortgage or Heloc?
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Home Mortgage has 18 years left and is at $184,000 principal with a monthly payment of $1135 and an APR of 3.15%
HELOC has $24,000 principal left with a monthly payment of $400 and an APR of 5.5%
I have paid roughly $1260 into our mortgage per month for the past 2 years and I plan to pay $400-500 per month on our HELOC.
We plan on staying in the home for about 8-9 more years, then downsizing. No other credit debt - just monthlies and car payments.
Should I use the $125 extra I have been paying into my mortgage to pay off the HELOC faster, continue to use it to pay off my mortgage faster, or save it for other things?
Thanks in advance
united-states mortgage
edited 32 mins ago
Bob Baerker
11.8k11743
asked 2 hours ago
Troy Kunze
62
New contributor
Troy Kunze is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |Â
up vote
1
down vote
favorite
Home Mortgage has 18 years left and is at $184,000 principal with a monthly payment of $1135 and an APR of 3.15%
HELOC has $24,000 principal left with a monthly payment of $400 and an APR of 5.5%
I have paid roughly $1260 into our mortgage per month for the past 2 years and I plan to pay $400-500 per month on our HELOC.
We plan on staying in the home for about 8-9 more years, then downsizing. No other credit debt - just monthlies and car payments.
Should I use the $125 extra I have been paying into my mortgage to pay off the HELOC faster, continue to use it to pay off my mortgage faster, or save it for other things?
Thanks in advance
united-states mortgage
edited 32 mins ago
Bob Baerker
11.8k11743
asked 2 hours ago
Troy Kunze
62
New contributor
Troy Kunze is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
1
Do you have an emergency fund (3-6 months of expenses in case something happens, plus at least $1,000 for big unexpected purchase)?
– GOATNine
1 hour ago
2
we have about 3 month saved away.
– Troy Kunze
52 mins ago
3 months should be enough barring other risk factors (like single income family or both of you in the same field or at the same company)
– J. Chris Compton
44 mins ago
What are the balances and rates of the car payments? Are they loans or leases?
– stannius
9 mins ago
add a comment |Â
up vote
1
down vote
favorite
up vote
1
down vote
favorite
Home Mortgage has 18 years left and is at $184,000 principal with a monthly payment of $1135 and an APR of 3.15%
HELOC has $24,000 principal left with a monthly payment of $400 and an APR of 5.5%
I have paid roughly $1260 into our mortgage per month for the past 2 years and I plan to pay $400-500 per month on our HELOC.
We plan on staying in the home for about 8-9 more years, then downsizing. No other credit debt - just monthlies and car payments.
Should I use the $125 extra I have been paying into my mortgage to pay off the HELOC faster, continue to use it to pay off my mortgage faster, or save it for other things?
Thanks in advance
united-states mortgage
edited 32 mins ago
Bob Baerker
11.8k11743
asked 2 hours ago
Troy Kunze
62
New contributor
Troy Kunze is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
Home Mortgage has 18 years left and is at $184,000 principal with a monthly payment of $1135 and an APR of 3.15%
HELOC has $24,000 principal left with a monthly payment of $400 and an APR of 5.5%
I have paid roughly $1260 into our mortgage per month for the past 2 years and I plan to pay $400-500 per month on our HELOC.
We plan on staying in the home for about 8-9 more years, then downsizing. No other credit debt - just monthlies and car payments.
Should I use the $125 extra I have been paying into my mortgage to pay off the HELOC faster, continue to use it to pay off my mortgage faster, or save it for other things?
Thanks in advance
united-states mortgage
united-states mortgage
edited 32 mins ago
Bob Baerker
11.8k11743
asked 2 hours ago
Troy Kunze
62
New contributor
Troy Kunze is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
edited 32 mins ago
Bob Baerker
11.8k11743
asked 2 hours ago
Troy Kunze
62
New contributor
Troy Kunze is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
edited 32 mins ago
Bob Baerker
11.8k11743
edited 32 mins ago
Bob Baerker
11.8k11743
edited 32 mins ago
Bob Baerker
11.8k11743
11.8k11743
asked 2 hours ago
Troy Kunze
62
New contributor
Troy Kunze is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked 2 hours ago
Troy Kunze
62
asked 2 hours ago
Troy Kunze
62
62
New contributor
Troy Kunze is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
New contributor
Troy Kunze is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
Troy Kunze is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
1
Do you have an emergency fund (3-6 months of expenses in case something happens, plus at least $1,000 for big unexpected purchase)?
– GOATNine
1 hour ago
2
we have about 3 month saved away.
– Troy Kunze
52 mins ago
3 months should be enough barring other risk factors (like single income family or both of you in the same field or at the same company)
– J. Chris Compton
44 mins ago
What are the balances and rates of the car payments? Are they loans or leases?
– stannius
9 mins ago
add a comment |Â
1
Do you have an emergency fund (3-6 months of expenses in case something happens, plus at least $1,000 for big unexpected purchase)?
– GOATNine
1 hour ago
2
we have about 3 month saved away.
– Troy Kunze
52 mins ago
3 months should be enough barring other risk factors (like single income family or both of you in the same field or at the same company)
– J. Chris Compton
44 mins ago
What are the balances and rates of the car payments? Are they loans or leases?
– stannius
9 mins ago
1
1
Do you have an emergency fund (3-6 months of expenses in case something happens, plus at least $1,000 for big unexpected purchase)?
– GOATNine
1 hour ago
Do you have an emergency fund (3-6 months of expenses in case something happens, plus at least $1,000 for big unexpected purchase)?
– GOATNine
1 hour ago
2
2
we have about 3 month saved away.
– Troy Kunze
52 mins ago
we have about 3 month saved away.
– Troy Kunze
52 mins ago
3 months should be enough barring other risk factors (like single income family or both of you in the same field or at the same company)
– J. Chris Compton
44 mins ago
3 months should be enough barring other risk factors (like single income family or both of you in the same field or at the same company)
– J. Chris Compton
44 mins ago
What are the balances and rates of the car payments? Are they loans or leases?
– stannius
9 mins ago
What are the balances and rates of the car payments? Are they loans or leases?
– stannius
9 mins ago
add a comment |Â
2 Answers
2
active
oldest
votes
up vote
2
down vote
I'll agree with @GOATNine's comment about having an emergency fund of 3-6 months expenses.
If you've done that (and you should if you're home owning and not home renting) they I would put the extra on the HELOC as the interest rate is higher.
However... You mention car payments.
So, this isn't what you asked, but here's what I'd advise:
Stop paying extra on the house and HELOC. Apply the extra money to the car with the lowest loan outstanding.
When that car 1 is paid off, put all the money you were paying extra + car 1's car payment amount as extra against car 2's remaining loan.
When that loan is paid off, apply that big pile of extra money to the HELOC, then apply to the house.
If you want to start a saving a smaller than car payment size amount into a separate bank account as a kitty for replacing the cars (which will go down in value and wear out) that would be fine too.
edited 10 mins ago
stannius
2,6131923
answered 1 hour ago
J. Chris Compton
2713
Thank you for your response.
– Troy Kunze
30 mins ago
add a comment |Â
up vote
1
down vote
Pay the loan with the highest interest rate first. If the rate of your car loan is higher than 5.5%, pay it first.
Theoretically, if you can find a reliable investment with rate higher than those of your loan/mortgage, you should invest instead of paying off loans. However, it might be difficult to find such an investment.
answered 15 mins ago
Xingang Huang
1734
add a comment |Â
2 Answers
2
active
oldest
votes
2 Answers
2
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
2
down vote
I'll agree with @GOATNine's comment about having an emergency fund of 3-6 months expenses.
If you've done that (and you should if you're home owning and not home renting) they I would put the extra on the HELOC as the interest rate is higher.
However... You mention car payments.
So, this isn't what you asked, but here's what I'd advise:
Stop paying extra on the house and HELOC. Apply the extra money to the car with the lowest loan outstanding.
When that car 1 is paid off, put all the money you were paying extra + car 1's car payment amount as extra against car 2's remaining loan.
When that loan is paid off, apply that big pile of extra money to the HELOC, then apply to the house.
If you want to start a saving a smaller than car payment size amount into a separate bank account as a kitty for replacing the cars (which will go down in value and wear out) that would be fine too.
edited 10 mins ago
stannius
2,6131923
answered 1 hour ago
J. Chris Compton
2713
Thank you for your response.
– Troy Kunze
30 mins ago
add a comment |Â
up vote
2
down vote
I'll agree with @GOATNine's comment about having an emergency fund of 3-6 months expenses.
If you've done that (and you should if you're home owning and not home renting) they I would put the extra on the HELOC as the interest rate is higher.
However... You mention car payments.
So, this isn't what you asked, but here's what I'd advise:
Stop paying extra on the house and HELOC. Apply the extra money to the car with the lowest loan outstanding.
When that car 1 is paid off, put all the money you were paying extra + car 1's car payment amount as extra against car 2's remaining loan.
When that loan is paid off, apply that big pile of extra money to the HELOC, then apply to the house.
If you want to start a saving a smaller than car payment size amount into a separate bank account as a kitty for replacing the cars (which will go down in value and wear out) that would be fine too.
edited 10 mins ago
stannius
2,6131923
answered 1 hour ago
J. Chris Compton
2713
Thank you for your response.
– Troy Kunze
30 mins ago
add a comment |Â
up vote
2
down vote
up vote
2
down vote
I'll agree with @GOATNine's comment about having an emergency fund of 3-6 months expenses.
If you've done that (and you should if you're home owning and not home renting) they I would put the extra on the HELOC as the interest rate is higher.
However... You mention car payments.
So, this isn't what you asked, but here's what I'd advise:
Stop paying extra on the house and HELOC. Apply the extra money to the car with the lowest loan outstanding.
When that car 1 is paid off, put all the money you were paying extra + car 1's car payment amount as extra against car 2's remaining loan.
When that loan is paid off, apply that big pile of extra money to the HELOC, then apply to the house.
If you want to start a saving a smaller than car payment size amount into a separate bank account as a kitty for replacing the cars (which will go down in value and wear out) that would be fine too.
edited 10 mins ago
stannius
2,6131923
answered 1 hour ago
J. Chris Compton
2713
I'll agree with @GOATNine's comment about having an emergency fund of 3-6 months expenses.
If you've done that (and you should if you're home owning and not home renting) they I would put the extra on the HELOC as the interest rate is higher.
However... You mention car payments.
So, this isn't what you asked, but here's what I'd advise:
Stop paying extra on the house and HELOC. Apply the extra money to the car with the lowest loan outstanding.
When that car 1 is paid off, put all the money you were paying extra + car 1's car payment amount as extra against car 2's remaining loan.
When that loan is paid off, apply that big pile of extra money to the HELOC, then apply to the house.
If you want to start a saving a smaller than car payment size amount into a separate bank account as a kitty for replacing the cars (which will go down in value and wear out) that would be fine too.
edited 10 mins ago
stannius
2,6131923
answered 1 hour ago
J. Chris Compton
2713
edited 10 mins ago
stannius
2,6131923
edited 10 mins ago
stannius
2,6131923
edited 10 mins ago
stannius
2,6131923
2,6131923
answered 1 hour ago
J. Chris Compton
2713
answered 1 hour ago
J. Chris Compton
2713
answered 1 hour ago
J. Chris Compton
2713
2713
Thank you for your response.
– Troy Kunze
30 mins ago
add a comment |Â
Thank you for your response.
– Troy Kunze
30 mins ago
Thank you for your response.
– Troy Kunze
30 mins ago
Thank you for your response.
– Troy Kunze
30 mins ago
add a comment |Â
up vote
1
down vote
Pay the loan with the highest interest rate first. If the rate of your car loan is higher than 5.5%, pay it first.
Theoretically, if you can find a reliable investment with rate higher than those of your loan/mortgage, you should invest instead of paying off loans. However, it might be difficult to find such an investment.
answered 15 mins ago
Xingang Huang
1734
add a comment |Â
up vote
1
down vote
Pay the loan with the highest interest rate first. If the rate of your car loan is higher than 5.5%, pay it first.
Theoretically, if you can find a reliable investment with rate higher than those of your loan/mortgage, you should invest instead of paying off loans. However, it might be difficult to find such an investment.
answered 15 mins ago
Xingang Huang
1734
add a comment |Â
up vote
1
down vote
up vote
1
down vote
Pay the loan with the highest interest rate first. If the rate of your car loan is higher than 5.5%, pay it first.
Theoretically, if you can find a reliable investment with rate higher than those of your loan/mortgage, you should invest instead of paying off loans. However, it might be difficult to find such an investment.
answered 15 mins ago
Xingang Huang
1734
Pay the loan with the highest interest rate first. If the rate of your car loan is higher than 5.5%, pay it first.
Theoretically, if you can find a reliable investment with rate higher than those of your loan/mortgage, you should invest instead of paying off loans. However, it might be difficult to find such an investment.
answered 15 mins ago
Xingang Huang
1734
answered 15 mins ago
Xingang Huang
1734
answered 15 mins ago
Xingang Huang
1734
answered 15 mins ago
Xingang Huang
1734
1734
add a comment |Â
add a comment |Â
Troy Kunze is a new contributor. Be nice, and check out our Code of Conduct.
Troy Kunze is a new contributor. Be nice, and check out our Code of Conduct.
Troy Kunze is a new contributor. Be nice, and check out our Code of Conduct.
Troy Kunze is a new contributor. Be nice, and check out our Code of Conduct.
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1
Do you have an emergency fund (3-6 months of expenses in case something happens, plus at least $1,000 for big unexpected purchase)?
– GOATNine
1 hour ago
2
we have about 3 month saved away.
– Troy Kunze
52 mins ago
3 months should be enough barring other risk factors (like single income family or both of you in the same field or at the same company)
– J. Chris Compton
44 mins ago
What are the balances and rates of the car payments? Are they loans or leases?
– stannius
9 mins ago