Author Topic: windfall--help!  (Read 2128 times)

KP

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windfall--help!
« on: July 15, 2013, 05:05:13 PM »
So i've wondered about this for as long as i've been working on paying off debts, but now i have about $17,500 after tax coming my way and i need to know which direction to throw it. The numbers....
 
Consumer Debt: 0
Mortgage: 89535 (95000 loan) 4.5%
         PMI: 87/mo
Student Loan 1: 2506   6.55%
Student Loan 2: 9624   2.1%
Student Loan 3: 12537 2.98%

So, do i pay down my mortgage to 78%? (the number that my bank gave me for the PMI to go away) it would take 17350ish to do so

or do i pay off the small higher interest loan and then mortgage?
i've BEEN putting everything extra towards school loan 1 and could have it gone in two months anyway.
i feel like getting rid of PMI is the right choice, now that i can do it all in one shot.....?


Another Reader

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Re: windfall--help!
« Reply #1 on: July 15, 2013, 05:13:58 PM »
I would probably do the same thing, based on what you have stated.  If I did not have a cash cushion, I might look at doing that first, then paying off the high interest rate loan, then throwing everything else at the mortgage.

Eric

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Re: windfall--help!
« Reply #2 on: July 15, 2013, 05:16:37 PM »

i feel like getting rid of PMI is the right choice, now that i can do it all in one shot.....?

That's what I would do, pay down the mortgage to get rid of the PMI.  That 1st loan, you're paying about $164 per year in interest.  That's exactly 2 months of PMI payments.  Getting rid of that PMI is the best thing you can do right now.

smalllife

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Re: windfall--help!
« Reply #3 on: July 15, 2013, 05:31:22 PM »
I would max out a Roth and send the rest to the mortgage personally, but it's a close call.   

aj_yooper

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Re: windfall--help!
« Reply #4 on: July 15, 2013, 05:40:41 PM »
Such good fortune!

Check to see if your bank will end the PMI now, if you pay to 78%,  There has been discussion about the PMI in another thread which indicated some loans need to cure for 5 years before PMI can be zapped.