Should I pay off my smallest loan ?

1 Reply

One of my properties only has about $60k left to pay off. I'm not sure that I'll be buying another property within 1 or 1.5 years. So, I don't feel i need to save towards my next one just yet. The loan is at nearly 5% and I net $200 monthly after fees, tax, mortgage, Hoa , Etc. Should I just start dumping money into it and paying it off within the next 3 years? It would be nice to see the smallest loan paid off. 

At the same time I feel like saving towards the next home or a larger personal home. If I rented my current home the profit would be around 400 AFTER expenses. 

The problem is that both seem like good choices . 

Originally posted by @Kathy C. :

One of my properties only has about $60k left to pay off. I'm not sure that I'll be buying another property within 1 or 1.5 years. So, I don't feel i need to save towards my next one just yet. The loan is at nearly 5% and I net $200 monthly after fees, tax, mortgage, Hoa , Etc. Should I just start dumping money into it and paying it off within the next 3 years? It would be nice to see the smallest loan paid off. 

At the same time I feel like saving towards the next home or a larger personal home. If I rented my current home the profit would be around 400 AFTER expenses. 

The problem is that both seem like good choices . 

Hi Kathy,

If you are unsure when you may (or may not) make your next purchase, I think paying down the existing mortgage is a good idea, however, I wouldn't focus on the property that has the smallest loan balance. I would pay down the property with the highest APR. While it is nice to own a property free and clear, paying off the property where you have the highest interest rate will yield the best return for your efforts.

-Christopher

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