grabiner wrote:I would suggest going after the mortgage. It's an immediate 5.5% return (taxable, assuming you itemize deductions, so 4.18% after tax if you are in a 25% bracket) and in a few years, you'll probably be able to refinance at a lower rate and get even more savings. The faster you pay it off, the sooner you will be able to refinance, although you can't do much about the other factor in refinancing, which is what happens to home prices. When you do refinance, you can allocate the extra savings to your retirement accounts.
If the student loans are at 3.3% fixed and tax-deductible (2.48% after tax in a 25% bracket), you should make only minimum payments on them until you can save enough to max out your retirement accounts.
NorCalDad wrote:You mentioned that your wife is losing her job. This is a big factor that changes what I was going to advise. How certain are you that you can still afford your expenses on your income alone and still have money left over?
NorCalDad wrote:Having been in your underwater shoes for a brief period before our housing market took off in the last year, I was going to advise paying down your mortgage because of your high interest rate and to gain peace of mind. However, if you are going down to one income and if there is any possibility it does not make financial sense to stay...
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