I'm going to be selling my house in 3 years, I have a 30 year fixed rate mortgage.....?

Question

at 5.85%, i have 27 years left on the mortage. I was wondering for the next 4 years, is it better to put money in savings bank account getting about 3.5% interest rate or should i pay down the principle. Of course i'm not paying off the mortage until i sell. And i don't want to put my savings into the stocks. Does it really make a differnce if i put my money to pay off some of the princeple now, even duo i'm selling it in 3 years?

Answer 1

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Answer 2

Definitely don't bother paying down the principal if you are going to be selling soon. The money is a lot better off paying off credit card debt or other debts or even sticking it in a high yield CD/savings account.

Check http://www.bankaround.com for a high interest account near you.

Answer 3

depends on your market --if declining put it on the house  if not any of the three will be fine

Answer 4

If you have any credit card debt or don't have a decent emergency fund, do that first.

Then if the only investment you are considering pays 3.5% and the mortgage is at 5.85%, pay on the mortgage.  (If you were considering other investments that paid higher returns, the answer would be different.)

The answers that mention the value of the house as being relevant are all wrong.  The value of the house itself in this particular case makes no difference if you are going to pay off the mortgage one way or the other, sooner or later.  (It would only make a difference if you were deciding whether or not to buy the house, or whether or not to walk away from the mortgage.)

Answer 5

Paying down the principal doesn't make sense if you are going to sell so soon. So I would explore other avenues to invest in. CDs, bonds, money market accounts, etc.

Answer 6

MONEY doubles every 7 years at 6%.  At 5.85 you are pretty close.  

I agree you probably should not try to pay down the principle.

If you are looking for a safety blanket maybe you should pay a few months ahead.  This way just incase the economy sours more - you have a place to stay.

  I would suggest that you pay off any credit cards, or other high interest debt.

I disagree with putting your money in CDs, money market, stocks.  Inflation is tearing this year. It is much higher than is being reported.  Look at the price of Milk 2.5 to 4.00 in a year.  

If you want to invest commodities.

Suggest you read www.dollarcollapse.com

90% right on references, and economic problems on the horizon.

Answer 7

Most professional advisors will say to pay down unsecured debt first (credit card, etc), then housing.

You are also assuming that your house will increase in value over the next 3 years. I think this is a little too optimistic.

I would not buy a house that I was going to have to sell in a few years unless I was speculating that some real basis for a massive price increase and was also increasing in a wide region where the house is located.