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Hey all,
I just closed on my first house! I financed 33,000 dollars on it over a 20 year 5/1 ARM with the intent of paying it off in 5 years or less.The initial interest rate is 3.99. payment is around $202.
I currently owe 25,100 on a car loan at 4.09% Payment is $649 but I always pay at least $700
No prepayment penalties on either account.
I have around 10k in cc balances that accrued while I saved up for a down payment and some repairs, probably about 10% of my total UTL. Obviously this gets paid off first ASAP. Shouldnt take too long.
After that, I was looking for opinions on how to best pay these off. Would I be better off paying the ARM off during the fixed period and leaving the fixed rate car payment? Or hammering the car to 0 and making over 1k house payments once I have that chunk freed up?
Thanks!
Aside from my jealousy of such a low mortgage.
I would say pay the house off first to avoid the ARM snapping back to something high.
What were your mortgage scores? Something like a 685 can get you 2% or thereabouts on a car loan, may be worth refing the car off 4 (not that it's a bad rate but would get your payments going further).
I agree with twalsh's comment re: pay down the house first as ARM resets might be awkward in a couple of years; however, that auto payment seems high for what you owe for that rate on the car by a non-trivial amount. Might be able to get out of debt that much faster, I'd look into it personally now that the mortgage is closed.
Congrats on that!