2006-06-28 06:07:12 · 6 answers · asked by Ramon C 1 in Business & Finance ➔ Personal Finance
I'd pay it off. Home values can fall, and if you still had the loan, you'd be paying more than the house is currently worth.
2006-06-28 06:11:22 · answer #1 · answered by Mama Pastafarian 7 · 1⤊ 0⤋
Okay - this is very easy.
Pretend you have three bills that you pay the minimums on once a month. Let's say you pay 10 dollars each. Now - take your first bill, and instead of 10 dollars a month, pay a little more. Do that, while still making minimums on the other, until the first one is paid off. Then, take the money you used to pay on the first one, and apply it all to the second one. When the second one is paid off, take the money you applied on both the first, and the second, and apply it to paying on the third - you're not missing the money because you were paying it out anyways. You'd be surprised, how fast you can erase your debt. Do this with your home loan and your other obligations and you'll have that thing down in no time.
2006-06-28 06:12:23 · answer #2 · answered by Fun and Games 4 · 0⤊ 0⤋
You should pay only the minimum until you have paid off all other debts with higher interest rates (e.g. credit cards, school loans, etc.)
Be sure, when comparing interest rates, to take into consideration any tax benefits associated with them. Home equity loan interest is generally tax deductible especially if used for home improvement.
Also, if you were lucky enough to lock in a rate that is lower than what you would be getting by investing the money (bank account, CD, Bond, etc.) then you should obviously pay just the minimum on that debt and invest the extra money instead.
-Hope that helps.
2006-06-28 06:27:11 · answer #3 · answered by frd050101 2 · 0⤊ 0⤋
Depending on your income and other bills, as well as your financial stategy you can deal with it many ways.
Usually the interest is tax deductible on a home equity loan so you could just make the monthly payments if you want the write-off.
Myself, I hate having any sort of debt so I pay the minimum and then as much extra as I can so I could get the debt gone as fast as possible. Depending on the fine print, you might be able to apply any extra to the principal alone which is better than paying off extra interest.
2006-06-28 06:14:05 · answer #4 · answered by parsonsel 6 · 0⤊ 0⤋
Look into any tax advantages such a loan might have and look into any tax disadvantages. And pay it off. The future has many surprises, and winning a lottery is not very usual in one person's life.
I am long since out of debt, have an income, and a bit of a nest egg now, and I can't tell you how fundamentally much better I feel now.
2006-06-28 06:16:52 · answer #5 · answered by sonyack 6 · 0⤊ 0⤋
leave about 20% equity in your home and take the rest and put it in some type of investment where you can access that money easily but can still get a good rate of return.
2006-06-28 06:12:12 · answer #6 · answered by John m 2 · 0⤊ 0⤋