Should we pay off debt or save?
I've just started a property on the side. I recently received a check commission for about $ 6,000. After paying a few things I know have about $ 4,000. My husband and I would like to buy a house in the next year and it would be great to put towards a deposit (a low house prices would be around 400,000). If we use this money to save or pay two bills, we have a personal loan that has 1100 left on it, we pay 75 a month and the interest rate is 9.9%. We also need 2200 our son to bank cord blood. We pay 49 per month and interest is 11.9%. We also have my car loan which is about 14000, but I think we'll leave for now. I thought we could take the 49 and 75 that we used to pay bills each month and save. I also thought that if we pay these things off, it will improve our credit and we hope to get a better mortgage. What do you think?
I recommend: 1) Find out what your FICO credit score is first. If it is in the middle and 700 high, then you are probably not need to go to credit score higher for better mortgage rates. 2) If you save $ 4,000, said in a CD or money market account, you will probably have contributed to under 6% interest, with taxes that comes out to lower less than 4%. However, you pay 10 ~ 12% on your loans. The net difference is you lose about 6-8% per annum on the $ 4,000 by the record. If instead, you pay the debt and records the payment of the debt of $ 124 per month in one year, you would save $ 1,488. So the question is when will you need $ 4,000? If you really want to buy a house in the next 12 months, then you should put in knowing that you pay more interest in this practice. If not, Then pay off your debts and you can earn enough money in two and a half years for the deposit. Good luck! Just Be!
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