Should I pay more then just interest on a 2nd mortgage?

My husband and I owe about $98K on our house. Before we got married, he took a $40K second mortgage on the house to pay for graduate school. We are only paying the interest on the 2nd mortgage, at about $350 a month. We are planning to sell in two years and we'll list the house for about $170K. My question is, do we continue paying just the interest on the 2nd mortagage and pay it off when we sell, or should we start making larger payments off the balance? Any help you can give is greatly appreciated!!!Should I pay more then just interest on a 2nd mortgage?
If you are definately going to be selling off the house in two years, then just paying the interest is a smart thing to do. What will happen is that when the house sells, both mortgages will be paid off and you will have the balance to invest in a new home. The only way you could get in trouble is if your plans change for whatever reason or you are unable to sell your home for it's full value. Just make sure you are not just spending away what you would have been using to pay down the mortgage and it is being saved or invested. A number of people get caught in that ';spend everything'; trap.Should I pay more then just interest on a 2nd mortgage?
If you have the option to pay larger payments onto something ensure they go toward the highest interest debt to reduce your costs. Your second mortgage will likely be charged interest at a rate higher than your first, so applying towards that is a good thing. Regardless of whether or not you sell the house in the next couple of years, you still owe the money, so putting a dent into it now will only give you greater equity when you sell! Good luck!
DANG I hate when Credit Guru steals my answers!





He's absolutely right. Pay off your credit card debt, then use that money to start paying off your 2nd mortgage.





From what you describe, I see no advantage in paying off the mortgage at this time.
Pay off your credit cards first.





For 2 reasons:





1) Credit card interest(even if it is less than your 2nd) is not deductible, your 2nd interest is so if you are in the 15% tax bracket then you are really paying $297.50/mo interest)





2) Paying off credit cards will bring your balance to zero, which is the best thing to do to start to repay your debt. Credit cards are the WORST way to borrow money.





Once your credit cards are paid off and you are comfortable with the amount of money you have in savings %26amp; investments then you can start paying on the 2nd principal.





A final note, when you pay off your credit cards just file them away and don't use them. Don't close them, that might potentially lower your credit score and I am assuming when you sell this house you will be buying another so you want the highest credit score so you get the lowest interest rate.





Good Luck
I think it is always a good idea to pay off debt. Unless you need that money for something else immediately. If you would just be putting it into savings, you are better off paying down your debt because the interest you are paying on the mortgage is most likely much higher than any return you could guarantee yourself in any savings or investment plan.
I would suggest you guys develop a budget and pay off as much of the principle as you can. Principle drives equity.





Check out www.daveramsey.com for good ideas on getting out of debt quicker.