I have some money saved up that could pay off my 2nd mortgage which is at 8.25% and has a payment of approx $250/month, or could be used as a down-payment on a condo that could be rented for maybe a $100 profit each month.
Is it better to pay off a second mortgage, or use that money for a downpayment on an investment property?
29
Mar
Austin
March 29, 2010 at 7:35 am
The less in debt you are the better. Or try to refinance your 2nd mortgage for less than 8,25%.
Good Luck
Lauren F
March 29, 2010 at 7:36 am
Your choices are to put your money into something that will ** definitely ** save you $250 a month, or to put it into something that will ** possibly** increase your income by $100 a month?
No brainer – pay off the second mortgage, get your debts lowered. It is more money in your pocket than a rental, with none of the headache that comes with being a landlord.
I would then take the $250 you are no longer paying on your mortgage, and look for a way to put that to work saving you even more money (like pay off a car loan faster).
MSAD
March 29, 2010 at 8:28 am
Pay off your second mortgage.
If you run into unexpected financial trouble, such as a lay off etc.- it’s better to have less debt.
After you pay off your 2nd mortgage then work to pay off your first. Once your house is paid off, then work to save up money to purchase an investment property outright.
Guna s
March 29, 2010 at 9:09 am
Paying second Mortgage [2nd mortgage] is the better choice.
I do found a second mortgage provider here : http://www.mortgage.crosspower.in/
nanny
March 29, 2010 at 9:27 am
If the condo is selling at a discount, and will begin appreciating soon you would be better off to invest in real estate. This will increase your cash flow and your net worth. Just make sure the condo will make you money.