My home mortgage is the largest debt I have. Should I send my extra money each month to pay down my home, or my others bills like my credit cards?
Many mortgage lenders will not accept less than a full payment. That means that sending an extra $100 with your $800 payment may not save you any money. They may return the funds to you or perhaps place it in an escrow account to be used on your property taxes or insurance. Sending a complete payment, in addition to other payments can save you a tremendous amount over the life of a 15 or 30 year loan, but your credit cards likely have a much higher interest rate. By paying credit cards first you can save more over the life of that debt. Additional money can be paid against your mortgage later. Also, your mortgage interest may be a primary deduction on your income taxes. That makes that interest expense a little less than it shows at face value because you benefit from it on your tax return. Pay the credit card first.
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
Many mortgage lenders will not accept less than a full payment. That means that sending an extra $100 with your $800 payment may not save you any money. They may return the funds to you or perhaps place it in an 