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Subject:  Re: Any Advice? Date:  1/11/2005  5:14 PM
Author:  JAFO31 Number:  43976 of 88775

JOETAB24: "we are in a "starter home." bought in 02 for 90K. It would probably go for 127-130 K today. our current school district is mediocre but has a good repuation. we are on the finge of the city and concerned about the neighborhood going down rapidly; some parts already have. I would like to sell but know we cannot at this point.

I am considering paying off the car and using the $266 from the car to start paying down the house. Is this the best way to use the inheritance? What other options do I have, considering all of the factors and the new baby? Thanks for reading."

I doubt that paying of a car loan at 1.9% is the best use of funds.

You have posted essentially the same post on several boards; are you reading the responses.

I previously responded at post No. 14470 on Budgeting

I am beginning the think that you have already made up your mind and are simply searching for someone to give you the response for which you are looking.

Why can you not sell at this point?

Is the mortgage an adjustable rate mortgage? If it was, then a huge payment should be reflected in lower required payments after the next regularly scheduled adjustment.

If it is a fixed rate, then you would decrease total interest paid but not improve cash flow with a large payment.

Paying off the car loan improves your monthly cash flow by decreasing required expenses, but given the rate and the 2.35% ING rate another poster noted, it does not appear to be a good financial move.

Regards, JAFO

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