Offer your thoughts or opinion on the input financial query or topic using your financial background.

Pay down on second mortage when underwater?
Well, I suppose it depends on your idea of a "lost cause". Are you planning to lose the house to foreclosure?  If so, then yes, it's a lost cause.  Don't waste your money paying down the principal. In any other scenario* you should absolutely pay down the principal to the extent that you'd pay down any loan with nearly 9% interest (in other words, moderately aggressively). The fact is, you owe someone $265,000 unless you plan on losing the home to foreclosure.  You can manage the amount of interest you pay while you hold that debt by paying it down. * Short sale and bankruptcy would be special conditions as well, but not exactly the same effect as foreclosure.