| What to do, put cash towards mortgage or car loans or invest |
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Prime
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 18 Apr 2005
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| What to do, put cash towards mortgage or car loans or invest |
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Hello. My wife and I are both 28 yrs old. We are currently building a house for $215k and have already put down $22,500 in cash for it. We are selling our current home and expect at least $30-35k in equity from it. We have 3 cars and besides our mortgage, our only other debt is just one $260/month car payment for about another 3 yrs (owned, not leased), no credit card or other debt. One of our paid off cars is dying and has to be replaced. So I need to buy a new car very soon.
My question is this:
Is it better to use the $30k in equity when we sell our old house to pay off the rest of the 1 car we still owe on and also pay cash for a new car, leaving us with JUST a mortgage for debt?
Or would it be better to apply the $30k in equity towards the new house, have $200/month lower mortgage payments, but also have ~$560/month for 2 car payments?
OR would it be best to invest the $30k in equity into something else?
Obviously paying off the cars is better for the short run month to month budget, but would one way or the other have any other advantages?
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Mon Apr 18, 2005 4:50 pm |
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xboxundone
Senior Member
Cash: $ 67.83
Posts: 796
Joined: 19 Sep 2004
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My take would be pay off your one car and get the new one or new to you .....
why add on additional payments and checks when you don't have to as you will no longer have your current car payment from the sounds of it... then you only have mortgage and just take the money your would apply to your car payment and use it to paydown your mortgage ...
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Mon Apr 18, 2005 7:13 pm |
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BlankenshipFP
Money Talk Advisor
Cash: $ 79.56
Posts: 390
Joined: 05 Oct 2004
Location: Illinois
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OR - use the extra money to invest. At today's interest rates on mortgages, you should be able to do much better in the very long run with a well-diversified portfolio. Are you maxed out on 401(k), Roth?
Jim Blankenship, CFP®, EA
Blankenship Financial Planning, Ltd.
www.BlankenshipFinancial.com
Standard IRS Circular 230 Notice Applies
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Mon Apr 18, 2005 8:28 pm |
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