Should I Pay off my Second Mortgage or My Student Loan?
Hello – Since interest in the bank is only .25% these days, should I pay off my second mortgage on my house or pay off my student loan?
I live in Florida. The house that I purchased is now worth $ 40k less than when I bought it. My student loans are $ 30k and my second mortgage is $ 30k. Interest on my student loan is 1.625% and my second mortgage is 8.125%. I save several thousands each month and I fully contribute to my 401k.
I understand that Florida is a full recourse state so my thought was that the student loan should be top priority for paying down despite the fact that the second mortgage is at the higher interest rate.