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should i use the equity from sale of house to clear all loans...

(4 Posts)
hermykne Sun 09-Sep-07 21:46:20

like car loan? clear credit card, not much, but have no loans just the regular monthly overheads
this equity is going in to a deposit account for huse purchase next year, while we rent in the interim.

gemmiegoatlegs Sun 09-Sep-07 21:47:38

yep. cos i bet the interest on your loans is far more than the interest on your savings account. clear the debt first, IMO

hermykne Sun 09-Sep-07 21:52:32

thought so, thanks

flowerybeanbag Sun 09-Sep-07 21:56:18

But presumably if you use the money to pay off loans rather than keeping it for your house purchase, you will have less deposit and therefore need to get a bigger mortgage to buy your new house, which effectively means you will be paying the amount back over 25 years rather than 5 or whatever?
In which case it would be more expensive to pay stuff off with it than it would to put it towards a new house and reduce your monthly mortgage payments once you are in the new place.

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