Submitted by tryingauthenticity t3_103iikb in personalfinance
My relative has always been good with money and has a credit score above 800, so I generally trust her judgement.
She is telling me that I should ride out my 30 year mortgage (only a couple payments in) instead of aggressively paying down because of tax incentives. The standard deduction seems to be greater, so I don’t think there are any incentives? I owe about $600 a payment, and currently do $100 extra. Due to this I’m going to finish my mortgage in 23 years.
I am about to get a raise of about 1.5k-3k a month more than my current rate. If I put $500 extra towards the principle a month with the raise, I’ll pay off my mortgage in 10 years and save over $50k in interest. I’ll also build a solid savings for any emergency by “only” putting $500 extra. If I have a safe amount in savings, I can do some lump sum payments on the house too.
Does this not make sense to do?
I also have a car loan, but putting $500 extra a month on it will only save me $1.5k in interest over the term of the loan.
ETA: I see a bunch of comments come in my queue but are quickly removed probably by the automatic mod system or something. They all have to do with that I probably live in a shack in Alabama, I live in a northeastern city with a metropolitan population greater than 2 million last I checked. We have like three or four research universities, with two being ranked number one in the country for certain subjects. A handful of other smaller universities. It’s a 2bd, 1 bath, attached 1.5 car garage, 4 car driveway, etc. it’s really great and I can’t believe I was the only bidder! My friend is a professional inspector and came to every house I toured and helped me decide on this one.