Mortgages and Loans Q&A
Q: Our house is worth $35,000 less than what we owe on it. We’ll likely move into a bigger house soon as we start a family. Should we keep paying down our mortgage making prepayments?
A: If you didn’t owe more on your home than it’s worth, we’d recommend using any extra cash to pay off your mortgage early. But given your situation and the unstable housing market, you’re probably better off saving the extra money rather than using it to prepay your mortgage. While you owe more on your home than its current value, that may change if home values eventually rise in your area. Meanwhile, keep up your payments to the lender and save whatever extra money you can. Then you’ll have savings for a down payment on your next home — and, if you have to, you can make up the deficit on your current mortgage.
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