Is it a good idea to pay off 2 small loans off by rolling them into my mortgage at closing?

I am closing on my new house (construction to permanent loan) which is a 30 yr fixed at 5.75% interest. I had to have a $20,000 allowance in case something unexpected came up during the construction. It doesnt look like i'll have to use that money, so I can either get the money back cash or take it off my mortgage. I have an ATV loan with a payoff of $6000 @ 7.75% and my student loan at $7200 @5.50%. I was thinking of paying off those 2 loans with the allowance. Does this make good financial sense? I owe 3 yrs on the ATV and god knows how long on student loans about 7 or 8 yrs i think. ATV loan is $165/mo and the other is $78/mo.

house is $167000 @5.75% plus whatever i take of that allowance. I cant figure out which is the best move?

Is it a good idea to pay off 2 small loans off by rolling them into my mortgage at closing?

It would make sense to pay off the ATV, since the interest is higher on that loan, but not the student loan. If money is not too tight, you can then take the difference of what you save on payments (house and ATV separately vs. the one house payment) and apply the extra to your student loan to pay it off early.

Is it a good idea to pay off 2 small loans off by rolling them into my mortgage at closing?

what will the monthly payments be with the allowance pay back and without. If you pay back the allowance and the mortgage payment will be $165+$78=$243 less, then I would just give back the allowance. This will be an overall better cash flow. The mortgage payment has to be a greater savings than the 243 you will be paying monthly for these 2 loans. The interest on the student loan is tax deductable. The interest on the ATV is not. You may wish to consider paying off the ATV and giving the remainder back to the mortgage and keeping the student loan as is.

Is it a good idea to pay off 2 small loans off by rolling them into my mortgage at closing?

I would pay them both off and take the higher mortgage amount. Definitely pay off the ATV because it is at a higher interest rate and the interest is not tax deductible. Paying off the student loan is a little trickier. It is a lower interest rate and the interest is tax deductible. However, the reason I say to pay it off is because it will eliminate a monthly payment so you don't have to worry about it. PLus, come tax time you only need to worry about deducting interest from one loan instead of two.