Pay down the house or Save (not invest) the money, Which makes more sense (cents) (puts, mortgage)

[Foreverking]

Hello, I am trying to find ways to get ahead. I want to sell my home in one year. my payment is 770 a month, which includes Taxes and Mortgage insurance. I owe $103K My rate is 4.5 percent (FHA). I have the ability to pay an additional 1300 a month on the mortgage for one year (or more years if I stay here). I know there is no guarantee but Im here in AZ where hope values are skyrocketing. Im hoping the values jump another 20K in a year (or more). Anyway, is it better to put this 1300 a month into the home or just save it in savings. Which puts me further ahead financially? Once again assuming my home goes up in value either way?

[LordSquidworth]

If savings is earning less than 4.5%, then paying the mortgage off is. Assuming you're still paying interest.

[wankel7]

It is probably too late but the Mortgage insurance rates for a streamlined FHA refi were super low...or did you already do it?

[AnywhereElse]

Pay it on the house as saving it, you will never come out ahead.

[LordSquidworth]

Originally Posted by wankel7

It is probably too late but the Mortgage insurance rates for a streamlined FHA refi were super low...or did you already do it?

He said he is selling it in a year.

[MrRational]

Originally Posted by Foreverking

Pay down the house or Save (not invest) the money, Which makes more sense (cents)

It's not an either or. Almost nothing is an either/or question.
It's a when and how to get EACH done.

I want to sell my home in one year.

Assuming this happens in that time frame...
nothing is gained by owning vs having a balance to pay off when you go to settlement.

[Foreverking]

Originally Posted by LordSquidworth

If savings is earning less than 4.5%, then paying the mortgage off is. Assuming you're still paying interest.

With out putting the money at greater risk, I don't know how I would guarantee 4.5 percent savings.

So would my net worth be more if I applied that 1300 extra towards my mortgage? Im all about paying off a mortgage, I just don't want to be around (Arizona) long enough to pay this one off.

[debtmonger]

I would put the 1300 toward knocking down the mortgage. You can't beat 4.5% unless you invest it and you need a longer time frame to invest. 1 year does not cut it. Pay down your mortgage.

[WyoNewk]

I'd say it depends on how much savings you currently have. If nothing, save it. You might have an emergency or need to continue making payments on the home after you move, if that's the plan. If you have no savings account now, in a year you could have $15K in an account for emergencies, and that's about the minimum I'd want. The difference in the interest will be minimal -- maybe a couple hundred dollars.

[LordSquidworth]

Originally Posted by debtmonger

I would put the 1300 toward knocking down the mortgage. You can't beat 4.5% unless you invest it and you need a longer time frame to invest. 1 year does not cut it. Pay down your mortgage.

^^