The recent post stating 36% total debt and 28% for house go me thinking of our percents.
The only debt we have is the house and car, (though I aught to go pay the car off.)
The total salary is easier so I will use that:
house = 26%
car = 9%
total debt = 35%
Guess my debt is 'OK' according to financial planners.
Though since our salary has increased dramatically that was not true when we bought the house.
total debt = 2.5 times his salary, wonder if that is too high.
And my number one question, how to get rid of the house debt faster than the 30 years? Sure we can pay off the car and then in a few years have the EF back up, but.....we will need a bigger car, so we need to use the car payment amount to save up for a bigger one, can't use it to the house.
I could cut a few bills, but I really don't want to.
Guess I should join the house debt is fine group.
So what percent is that anyway?
September 6th, 2008 at 04:16 pm
September 6th, 2008 at 05:48 pm 1220723329
Prepayments count for a lot less as you move beyond the halfway point (15 years) cus you're monthly payments contain less interest than they did in the early years, when the payments are mostly interests, not as much principal.
So i guess it depends how far into your mortgage you are. But it doesn't sound like it's really important to you, so i wouldn't worry about it too much if you're happy with the current state of affairs.
September 6th, 2008 at 09:08 pm 1220735315
September 6th, 2008 at 10:48 pm 1220741317
September 7th, 2008 at 12:47 am 1220748477
September 8th, 2008 at 08:57 pm 1220907420
For example if you had $25 extra to pay towards a $250 payment vs a $2500 payment, logic would tell you that the $250 payment would disappear from budget faster.
If you can aggressively pay down the mortgage it is a really good deal- increased liquidity (more money in budget) and less debt.
If you would only make little extra payments, consider other ways to get out of mortgage debt- like investing money aggressively, then when the investment has enough to pay down the mortgage, cash that out and pay it down.
I have a $390 second mortgage payment. I have $700 available to pay it down in about 23 months. That will wipe debt from 30 year repayment plan to a 8 year total repayment and only 5 years of applying the $700 extra towards it. If I round the payment from $390 up to $400 that wipes 6 years off the 30 year repayment schedule.
Paying down debt is compounding in reverse.