Looking for financial calculators and advice?
I'm looking for someone or something to answer this question for me. I a mortgage at 5.75% with 28 years fixed it, and I also have a student loan at 4.125% at 25 years it fixed. Mortgage is approximately $ 200K, and student loans around $ 30k. I need to know whether to pay the student loan, and then use this additional payment per month to pay the mortgage or down, or is it better to pay the mortgage because it is an interest rate higher. The payments are tax deductible, and I'm in the tax bracket of 28%. I have no other debt. I work on creating a savings account to cover expenses in case of emergency, and I contribute the maximum each year to my IRA account. I can not get a 401k. I have two young children, I need to start saving for college, but have not yet done. Someone knows a good calculator that will allow me to plug my numbers to see where I can get the best results with extra income? Thank you.
In general, you always want to pay your most expensive debt first, however, in your case, you have excellent rates on loans, and you are not really able to be concerned about repayment of debt in a hurry. You have other priorities, so just pay the minimum. Last thing you want to do is to block the money you might need to use for retirement / education of children in the equity in your house (which does not affect the market value of your home at least) and then to use a real estate loan capital at a rate higher than you 're paying for the mortgage if you need money on the road. In addition, both your rates are so low that, if invested your money beyond what is necessary to make the minimum payment, you will come out well ahead in the long term. Regarding savings for children college, you need a knowledgable financial planner to look on your total assets and income to put together some projections. Your income, that you did not mention, is what will be the most significant impact on everything you like to do. inheritences future may also play a role the long-term planning.
