What should be paid first? Second mortgage or student loan by joymali


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									      What Should Be Paid First? Second Mortgage Or Student Loan

A single loan is hard enough to pay back, what more if you have two? Do you know which one
you should pay for first? The truth is, there is no right answer to that question but there are
factors that you have to consider when it comes to repaying your student loan and repaying
your mortgage, such as the amount of debts and the payment terms.

Keep in mind that it is best to pay for the larger debts first. Paying for the bigger loan will help
you save more in the long run and you’ll finish off that debt faster and it will soon be out of your
hands. If you are thinking about paying for your mortgage later for the interest deduction, then
you might want to think about it again because you will only be getting a small portion with the
deduction. While student loans are surely tax deductible, so no matter what you do the tax will
really be reduced. Student loans are also very flexible in payment terms and you are usually
allowed to change the terms and it can also be based on a scale, your income and it can even
be deferred if you are experiencing financial difficulties.

Paying down your mortgage first will make most sense in mathematic terms due to the interest
rate. Also, if you do not want to leave a huge loan with your family if you pass on, then it’s best
to pay for the mortgage first because student loans die with you while mortgages do not. Paying
regular payments and keeping track of your free credit score report is definitely an option to
maintain your credit’s health no matter which one you are paying off first.

You can also try to finish off paying the one with the biggest interest. The more you skip out on
the one with the higher interest. The more you’ll have to pay in the future and the bigger you’ll
debts will become. The student loan is less to worry about because if you lose your job, it will be
put to deferral or forbearance. But if you lost your home to foreclosure, you will be sued for the
balance of the home equity loan.

Take everything in consideration and figure out what’s best for you, your family and even your
credit’s health.

If you are a college student, then as much as you want to screw up your FAFSA, you sure want
to improve your free credit score. For managing finances affectively always keep a check on
your credit history and credit score from the start.

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