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Wally Katz
  • Philadelphia, PA
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another (confused?) debt management question

Wally Katz
  • Philadelphia, PA
Posted Jul 12 2019, 08:34

Have a couple of loans and I cannot for the life of me figure out what makes the most sense in terms of trying to wipe them out or just invest the money and ride them out.

1 mortgage @ 215k, 4.2%, 30yr term, 30 yr amort. (primary residence) monthly pmt ~1700

1 mortgage @115k 5%, 10 yr term, 25 yr amort (business) (monthly pmt ~700) - 5,4,3,2,1 prepay

Biz loan @275k, 4.5%, 10yr term, 10 yr amort. (monthly pmt ~3000) 5,4,3,2,1 prepay

Second year in business. First year net was $200k. On track this year to do $300k net. My gut thought was to wipe out the 10 yr term mortgage even with the 4% prepay penalty as I am basically only paying interest to hold it and will still have to pay $80k at the end of the loan term anyway. Then maybe try to bump the other 2 loans by $1000 each monthly in terms of payment so they get paid down sooner. And then invest whatever is left after taxes and life expenses. Or do I just ride those out at the current interest rates and invest all proceeds after taxes / expenses? Or should I be dumping everything into investments and just hold the loans as they are all 5% and below? When I calculate how much interest I would pay over the life of everything I feel like I am just throwing money away for nothing..

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