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I have a 9 yrs left on a 15 yr mortgage at 5.12 ...

I have a 9 yrs left on a 15 yr mortgage at 5.12% balance is 83,000 my payments are 1,100 monthly.I also have a 2nd for 110,000 at 6.99% for 30 yrs balance is 105,000 payments are 750.00 mo. my question is which of these loans would I be better off in making a 1 time principal payment of 50,000 I need to cut back on my monthly payments.  thank you


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pinky
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A one time payment of $50,000 on either is not going to reduce your monthly payments. If you have equity and can find someone to consolidate these 2 mortgages then that would be your best bet.

In the future never, never, get a 2nd that is longer and at a higher rate than your first.

Don't just talk to one bank/mortgage company. Shop around to see if you can find a better deal with both mtg's combined - Look into one of the mtg's that is paid twice monthly which will help you pay the loan off quicker.

Be very careful, as I think you need someone to hold your hand through this process, and you want to be careful who that person is.
Posted 2008-10-28T00:06:11Z
pinky was invited by Yedda to answer this question.

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KAL
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Dress for the job you want and not the job you have; because life is what you make it to be.

He is right in some aspects; your monthly payment won't cange. I will assume that you took the 30 yr mortgage because it lowered the monthly payment.  I would put the 50,000 on the 2nd mortgage as to eliminate some of the finance charges.  The real killer of a loan is the term of the loan and not the rate.  The rate plays a large part one you know how long of a term you can afford.

By paying towards the second mortgage you would roughly save 42,000 in finance charges.  If you put the money towards the first mortgage you would only save roughly 22,000 in finance charges.  So you would save roughly 20,000 more by applying it to the second mortgage rather than the 1st.  I say roughly because it is a lot earsier to figure this out with the original figures rather then what is is now.

if you want to get your monthly payment down as well.  you need to refinance and have it re-ammortized for the new term and the new rate.  Currently a home equity will be running you about 7.24 on average. A mortgage is somewhere between 6.25 and 7.00 depending on the lender.  what you have to take in acount is that actual mortgages rather then home equity loans you will have some closing costs.  I would look into taking out a home Equity line. right now they are roughly Prime - .26 which will run you around 4.24% apr.  You would pay roughly $570.00  month and pay it off in 15 years.  What you have to keep in mind is that lines are variable rates. but no matter what you are gauranteed prime - .26.  No matter when you go to refinance, you will still have a rate that is lower than prime.  Prime would have to be at 7.25% to get the rate you have.

I hope I helped you in your decisions. Let me know if you have any other questions 
Posted 2008-11-01T00:09:44Z
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