2007-11-26 13:22:02 · 6 answers · asked by Bill M 1 in Business & Finance ➔ Personal Finance
always reduce debt as quickly as possilbe!!!
2007-11-28 07:56:10 · answer #1 · answered by Anonymous · 0⤊ 0⤋
In this climate it pays to understand your net worth. I would take a look at your entire financial health before you make this decision.
The idea is to have your net worth climbing faster than it is declining. What I mean by this is that you want your money to be in places where it will make you more than you are loosing in interest from debt.
Most mortgages, at least 30 year fixed, are around 6%-8% in interest. So, if you have ANY credit card debt, it would pay you greater dividends in paying this off first. Use your mortgage interest rate as a benchmark for the rest of your financial decisions. Let's call your mortgage the 0 risk rate. You know that you can make 6%-8% on paying down principal on a fixed rate mortgage. So, if you can make more by putting money in the stock market, which historically has made 13% over it's life, is more than what you are paying on your house. If you work for a company with a funded retirement account that matches funds, this is a 100% gain up to the matching amount. So, it would pay the most return to put money in the retirement account at least up to the matching.
So, I would say that the right answer for you, depends on the current health of your overall finances. Feel free to email me if you have anymore questions regarding personal finance.
Good Luck!!
2007-11-26 15:35:14 · answer #2 · answered by sfuller94 3 · 0⤊ 0⤋
I hope to God you don't have a mortgage if you're asking such question as this! The more the principle you pay down the less the interest you pay. Your interest amount is a reflection of your principle balance. There is no certain amount of interest that you have to pay on your loan before you can pay it off! However, you may have a different answer if you have an interest only loan. So please provide more detail in your future questions.
2007-11-26 13:38:27 · answer #3 · answered by DayTrader22 2 · 0⤊ 0⤋
Always pay extra on the principle if you can. Any extra $$ on the principle will cut down your repayment time.
2007-11-26 13:26:53 · answer #4 · answered by charlie m 4 · 0⤊ 0⤋
Why oh why would you want to pay more interest?
2007-11-26 13:30:13 · answer #5 · answered by beckoningsubstitutes 5 · 1⤊ 0⤋
More of the principal.
2007-11-26 14:59:24 · answer #6 · answered by !!! 7 · 0⤊ 0⤋