After we gathered up all of our bills and figured out the total amount we owed, the next step for us was to document our debt. We created an Excel chart, but any kind of chart or document will do, that included the following information:
- Name of creditor (i.e. Citibank)
- Amount of debt
- Interest rate (including any details regarding short term interest rate deals, i.e. 0% expiring on X date)
- Minimum payment
- Monthly payment due date
Read about Step 1 here.
1 comment:
So what would you suggest? Our debt picture is surprising similar to yours. $300k @ 6.3 on rental, $200k @ 6% on primary residence, $100k @ 5% on 2nd rental all are fixed 30 year loans. Plus a $55k interest only variable rate equity line of credit current rate is 2%. I pay the minimums on all the first mortgages and an extra $800/month on the line of credit. Did I mention it is currently only at 2% and will stay there until prime goes up but that too introduces risk at some point. Paying extra on the line frees my borrowing capability but its saving only 2% at least today. Paying down one of 1st mortgages ties up the capital until I refi or sell and I risk like you mentioned having invested even more in a overweight real estate portfolio. Our 401k/IRA are well funded and invested in stock/bonds so directing the extra principal to equities has different considerations. I know its a tough problem to have but it bugs me to think about where best to focus the extra dollars and would be interested in your thoughts on what you would do.
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