U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 03-10-2009, 06:40 AM
 
Location: Maine!
469 posts, read 1,631,357 times
Reputation: 319

Advertisements

Quote:
Originally Posted by mirela26 View Post
hootowl...beware of what you post on here...lol someone may take ur post as being IRRESPONSIBLE of not wanting to pay off ur mortgage..lol...ppl never ever look into disadvatages of that...my father payed off his and all the money could`ve come handy when some things in the house went wrong so i completely agree with u on that...lol

and what were your father's TAX DISADVANTAGES? read the OP and come back with an answer pertaining to his question (hint: he was asking about tax disadvantages to paying a mortgage off) before you start blasting everyone on this and other threads because you didn't like the answers of your own post. . .that has been thankfully locked by our moderators.

but to the OP, if you can pay off the mortgage, i'd say do it. that money that woud've gone to the mortgage can be socked in savings and used to fix things in the house or for a fabulous vacay!

Last edited by thechappells; 03-10-2009 at 06:54 AM..
Reply With Quote Quick reply to this message

 
Old 03-10-2009, 07:06 AM
 
Location: Columbia, SC
1,860 posts, read 4,337,158 times
Reputation: 775
Also, keep in mind as Dave Ramsey always tells his callers who ask this question, if you're really concerned about the tax deduction, once your house is paid off, you can always give what you would've paid in mortgage interest to your favorite charity and get the same tax write-off. And he also says - sarcastically I might add - if you get your house paid for and you don't like it, you can always take out a home-equity line of credit and go back into debt.

And the poster who said that the deduction is over-rated hit the nail on the head. To many people don't take into account that you get the standard deduction regardless, I did my brother's return last year, and even with the mortgage interest (they have a smaller starter type-home), him and his wife still didn't have enough to itemize, so in effect they benefitted -0- on their taxes.

I'm not saying it's not a nice perk to have as it helps lower our tax bill a little every year, but I'd be more than happy to pay the government a little bit more and have no more house payments!
Reply With Quote Quick reply to this message
 
Old 03-10-2009, 07:17 AM
 
Location: NoVA
230 posts, read 1,000,295 times
Reputation: 122
It's kind of the same concept as the person who collects all the retail coupons, thinking they are getting such a deal with 30% off, etc. Yes, but you have to spend $75 to get that 30% off, whereas you probably wouldn't be spending that $75 to begin with, if it weren't for that coupon. Smarter to just pocket the money if you are in that situation.

Also beneficial is, if you are in a position to do so, paying off your mortgage earlier than scheduled will save you thousands, possibly tens or hundreds of thousands of dollars in interest alone.
Reply With Quote Quick reply to this message
 
Old 03-10-2009, 07:38 AM
 
596 posts, read 2,494,037 times
Reputation: 201
Quote:
Originally Posted by ZakAttack View Post
It's kind of the same concept as the person who collects all the retail coupons, thinking they are getting such a deal with 30% off, etc. Yes, but you have to spend $75 to get that 30% off, whereas you probably wouldn't be spending that $75 to begin with, if it weren't for that coupon. Smarter to just pocket the money if you are in that situation.

Also beneficial is, if you are in a position to do so, paying off your mortgage earlier than scheduled will save you thousands, possibly tens or hundreds of thousands of dollars in interest alone.
HA. True. Or like the person that gets a $1 or $2 off coupon and drives to the other side of town to "take advantage of the discount"...$5 in gas later it actually cost more to get there and by the time they've left the store they've spent $20 they never intended too...great deal
Reply With Quote Quick reply to this message
 
Old 03-10-2009, 08:55 AM
 
Location: Wake Forest, NC
835 posts, read 3,527,258 times
Reputation: 646
This is a very personal question in that what is best for you may not be for everyone else. I would sit and do an analysis with my tax and financial advisors to figure how to best position yourself based on your individual goals and cash flow.

I run into this type of dilemna regularly when structuring mortgages for my cleints. They want no closing costs, no way they will pay discount points, or some other thing because some talking head on TV said it wasn't good or the only way to go.

Every financial decision must be evaluated on its own merits and not with a blanket statement.
Reply With Quote Quick reply to this message
 
Old 03-10-2009, 12:55 PM
 
1,059 posts, read 1,635,625 times
Reputation: 793
It's best to get a 15-year mortgage, but if you get a 30-year one, it'd be good to just pay an extra payment or two each year to decrease the term. You can give it in one shot or divide that by 12 and add that amount each month.

But if you do have the money to pay it off, by all means do it!! You get a higher return on your money when you invest it monthly than all in one shot anyway because of the way compound interest works. So I'd put the mortgage amount or almost all of it into maxing out retirement savings, stock market account outside retirement if you feel you want to save even more for retirement or save for big purchases 10+ years from now, or just into CDs/savings account, all of this if you have an 8-12 month emergency fund.

But think about it: it would be so much cheaper to stay in that home without a mortgage!! You'd only have repairs/maintenance, taxes and utilities, I'm jealous!
Reply With Quote Quick reply to this message
 
Old 03-10-2009, 04:39 PM
 
Location: Alaska
5,352 posts, read 15,849,431 times
Reputation: 3995
The only tax disadvantage of paying your mortgage off early is if you owe on other non-deductible interest payments. You're better off paying down credit cards and car loans sine they are not deductible.

There used to be the argument that you were better off investing those extra payments, making 8-10+% on them versus the 5-6% you're paying, but that argument went down with the market.
Reply With Quote Quick reply to this message
 
Old 03-10-2009, 07:32 PM
 
Location: Under a bridge.
3,196 posts, read 4,715,448 times
Reputation: 976
Quote:
Originally Posted by akck View Post
The only tax disadvantage of paying your mortgage off early is if you owe on other non-deductible interest payments. You're better off paying down credit cards and car loans sine they are not deductible.

There used to be the argument that you were better off investing those extra payments, making 8-10+% on them versus the 5-6% you're paying, but that argument went down with the market.
You're best off by paying off everything. I did. The freedom is great!
Reply With Quote Quick reply to this message
 
Old 03-10-2009, 08:41 PM
 
Location: San Jose (Willow Glen)
180 posts, read 626,630 times
Reputation: 96
Quote:
Originally Posted by dad2jules View Post
This is a very personal question in that what is best for you may not be for everyone else. I would sit and do an analysis with my tax and financial advisors to figure how to best position yourself based on your individual goals and cash flow.

I run into this type of dilemna regularly when structuring mortgages for my cleints. They want no closing costs, no way they will pay discount points, or some other thing because some talking head on TV said it wasn't good or the only way to go.

Every financial decision must be evaluated on its own merits and not with a blanket statement.
Amen...especially w/ today's rate environment.
Reply With Quote Quick reply to this message
 
Old 03-10-2009, 08:50 PM
 
Location: San Jose (Willow Glen)
180 posts, read 626,630 times
Reputation: 96
There are some things that people don't consider when deciding to pay down their mortgage balance or not.

If you decide to pay the minimum on your home and invest the difference because you have a low rate on your mortgage and you think you can get a higher rate of return somewhere else, then it's possible that you end up stepping over dollars to reach for pennies.

These decisions are not always made in a vacuum. Let's say that rates decrease and it starts to look like it makes sense to refinance, but now because you haven't paid down you loan, you don't qualify for the best rate. If that rate would have saved you even .25% in your rate over the long run, it would have trumped whatever marginally better savings you got in the stock market, or investment of the day.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top