So...as you know, I have two mortgages (one residential and one rental) and an auto loan:
Principal Mortgage - Original Amt: $108K; Current Balance: $97K; Interest Rate: 4.125%; 25 years left
Rental Mortgage - Original Amt: $101K; Current Balance: $81K; Interest Rate: 7.9%; 18 years left
Auto Loan: Original Amt: $17K; Current Balance: $12K; Interest Rate: 3.6%; 4 years left
I need your opinion on which to pound away at and payoff early. If you could, support your advise with detail/data.
Look forward to your comment.
What to Do....All Input Welcome
July 12th, 2017 at 03:26 am
July 12th, 2017 at 03:45 am 1499827524
July 12th, 2017 at 02:41 pm 1499866865
Regardless of the big picture, that 7.9% interest rates is awful. It would be my primary goal to knock that down enough to refinance to a reasonable rate. In the meantime, you are paying over $500/month to interest on that loan.
What is the purpose of $60,000 just sitting in cash? Beyond what you need for an ample emergency fund, it doesn't make sense to have cash sitting earning less than 1% while you have these interest rates on your loans. You have the cash available to refinance right now, it seems. So that is something I would consider.
July 12th, 2017 at 04:15 pm 1499872531
July 12th, 2017 at 04:26 pm 1499873179
July 13th, 2017 at 01:19 am 1499905172
In your shoes, I would look to max out all of the retirement savings vehicles available to you. Depending on what other debt you have, I would up my contributions to the TSP and set money aside to make the 2017 IRA contribution, if eligible.
Do you have other debt? If so, consider using some of the $50k to pay it off.
I would evaluate the rental property return before I refinanced. What is the property worth? What is the rent? Are you breaking even or are you cash flow positive after ALL expenses are considered. Selling might be a better option if the numbers don't support keeping it. If you keep it, consider various loans and your strategy in using them. Shop the loan if you are being offered 5.6 percent. That's too high.