As more and more people receive their economic stimulus tax rebate checks, they begin to wonder what they should do with them. Few people I know think that spending the money on something frivolous -- like a vacation or a big screen TV -- is the best idea. Indeed, many of the ideas I hear for the economic stimulus check include paying down debt and saving.
One idea, though, is to make a mortgage payment with your tax rebate money. And why not? When you make a prepayment, you build equity in your home faster, and you take off some of what you owe in interest. If you already have a good handle on your consumer debt, and if your savings is well padded, this may be a good option. But make sure you verify the following:
- There are no penalties for making a prepayment on your home mortgage loan.
- That you specify that the mortgage payment goes to the principal only. You don't want that tax rebate money going to interest. You want it to benefit you.
image credit: sxc.hu
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