curious homeowner
New member
- Joined
- Feb 5, 2014
- Messages
- 2
HI!
I recently bought my first house! Hooray for a steady paycheck...
And I have a quandary. I had to split the mortgage loan into two loans since I couldn't put 20% down, so I have one loan for $377,500 and a second loan for $27,500.
Now the first loan is a normal 30 year mortgage loan at 3.75% ($1770/mo) while the second is HELOC which will become a variable rate after a few years but currently is at 3.25% (making it roughly $75/mo).
Now I have a bit of extra cash that I would like to put toward paying down faster (while I have this income stream)...but which do I put it towards: the smaller loan which is a smaller % rate (but will go up in a few years to whatever APR happens to be, but which will erase that loan more quickly cause it is less $ per month?) or the larger loan since the interest on a larger loan is so much greater.
Amortization schedules can be kind of confusing to me, and I wasn't sure how to try to determine where my extra $500 a month would be more powerful, since I want desperately to make smart financially savvy choices, but it isn't a clear answer to me.
Thanks in advance for your help (and for letting me know why -- since that is part of what confuses me...)
Sincerely,
Confused but trying
Happy Homeowner - it is like I am finally an adult!
I recently bought my first house! Hooray for a steady paycheck...
And I have a quandary. I had to split the mortgage loan into two loans since I couldn't put 20% down, so I have one loan for $377,500 and a second loan for $27,500.
Now the first loan is a normal 30 year mortgage loan at 3.75% ($1770/mo) while the second is HELOC which will become a variable rate after a few years but currently is at 3.25% (making it roughly $75/mo).
Now I have a bit of extra cash that I would like to put toward paying down faster (while I have this income stream)...but which do I put it towards: the smaller loan which is a smaller % rate (but will go up in a few years to whatever APR happens to be, but which will erase that loan more quickly cause it is less $ per month?) or the larger loan since the interest on a larger loan is so much greater.
Amortization schedules can be kind of confusing to me, and I wasn't sure how to try to determine where my extra $500 a month would be more powerful, since I want desperately to make smart financially savvy choices, but it isn't a clear answer to me.
Thanks in advance for your help (and for letting me know why -- since that is part of what confuses me...)
Sincerely,
Confused but trying
Happy Homeowner - it is like I am finally an adult!