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










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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
















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










share|improve this question









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












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










share|improve this question









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






share|improve this question









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.











share|improve this question









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.









share|improve this question




share|improve this question








edited 32 mins ago









Bob Baerker

11.8k11743




11.8k11743






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




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












  • 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










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.






share|improve this answer






















  • Thank you for your response.
    – Troy Kunze
    30 mins ago

















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.






share|improve this answer




















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    2 Answers
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    active

    oldest

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    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.






    share|improve this answer






















    • Thank you for your response.
      – Troy Kunze
      30 mins ago














    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.






    share|improve this answer






















    • Thank you for your response.
      – Troy Kunze
      30 mins ago












    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.






    share|improve this answer














    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.







    share|improve this answer














    share|improve this answer



    share|improve this answer








    edited 10 mins ago









    stannius

    2,6131923




    2,6131923










    answered 1 hour ago









    J. Chris Compton

    2713




    2713











    • 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




    Thank you for your response.
    – Troy Kunze
    30 mins ago












    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.






    share|improve this answer
























      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.






      share|improve this answer






















        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.






        share|improve this answer












        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.







        share|improve this answer












        share|improve this answer



        share|improve this answer










        answered 15 mins ago









        Xingang Huang

        1734




        1734




















            Troy Kunze is a new contributor. Be nice, and check out our Code of Conduct.









             

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