which one to pay

Guest 0.10 Dollars($)

I have taken one 80/20 mortgage last year. I pay 6%/8% on the mortgage and $100 towards the principal each month. I also have a CC debt of about $1800 on which each month I am making payments of $100 at 12% interest.

Now I have got about $1500 money back from my tax return. I want to use this money to either paying of the CC bill or toward a principal payment on the mortgage. Which one should I make?

Guest 0.10 Dollars($)

I prefer to put any extra money to the debt with the lowest balance. That way I manage to eliminate something and get a boost psychologically.

You have the credit card debt as the one with the lowest balance and also with the highest interest rate. So, put the money in paying off the credit card debt first. After you finish off with your CC, target second mortgage.

jameshogg · Posted: Mon Jun 05, 2006 4:00 pm Post subject:

Hi,

I would like to utilize the tax refund and the extra $100 month on the second mortgage towards the CC debt as this one is the debt with the highest rate. Once I get rid of the CC debt in that way, I will have only two debts left with me.

Next I will concentrate on the second mortgage which is the next smallest one.

James

Guest 0.10 Dollars($)

Hi,

I agree with the other members. Another fact that I would like to mention here is that your mortgage interest is tax deductible but your CC interest is not. Hope you got the bottom line.

Guest 0.10 Dollars($)

Thx, I will pay off the cc and use the extra $100 which I was paying towards the cc, towards extra principal payments for the next few years.

jameshogg · Posted: Mon Jun 05, 2006 5:00 pm Post subject:

That's a wise decision. Best of Luck. Smile

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