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Along with creating a needless entry on your credit reports which can ding your overall score.
My three scores ranged from 494 to 628, what difference did that little ding make in the big picture? The only recent credit activity was the acquisition of and re-aging of several charged-off accounts by a debt scavenger.
Disproportionately, yes, but like my grandmother often said, "too good is no good" and as incomes rise above a point, the deduction (like some other itemized deductions) is phased out.
As originally designed, the deduction's benefits flow overwhelmingly to the highest-income taxpayers. The phaseout is just one of the tweaks Congress later added in order to soak the rich with stealth taxation, which is a disingenuous way to tax.
Better to have higher transparent tax rates than to raise revenue by phasing out deductions with a lower opaque rate.
The rich people are much smarter and clever with avoiding the tax. The mortgage deductions are for the middling.
My three scores ranged from 494 to 628, what difference did that little ding make in the big picture? The only recent credit activity was the acquisition of and re-aging of several charged-off accounts by a debt scavenger.
Anytime a hard inquiry is done your credit report takes a hit. It might be small and not very long lasting but never the less...
As one who has paid more to rent a room than my next door neighbor paid to own a house, why would a homeowner walk away from a mortgage which is cheaper than rent?
Would I rather have a little equity - and a locked-in P&I payment - than zero equity and rising rent?
um, duh.
You don't know the inside story so cannot make assumptions.
First paying rent is the end of your housing costs for the month in most cases. Aside from perhaps utilities you don't have any other checks to write. OTOH owing a home means you'll be paying taxes, utilities and other expenses (planned and not). Ever hear of the term "house poor"?
Even without a mortgage payment there are homeowners paying more each month in terms of taxes and so forth than renters. Saving grace from all this is the supposed equity one has in a home that can be tapped later. However that is not automatic nor promised. If you purchased a home for $300K and it is only worth $1.5K you still have a mortgage based on the former number but nothing to tap.
If you are lucky and have a mortgage with a "low" interest rate and affordable payments you can hang on until (hopefully) equity builds.
When my wife and I bought our house we put very little down in 2008. Household income was roughly $55,000 +/- (single income) we purchased a $175,000 house and I think I put something like $8,000 down. Our total cash on hand was maybe around $40,000 which included retirement account balances etc, I really don't remember exact figures.
We fully expected my wife to get another job (she quit hers to make our move) and you know what happened in late 2008. Jobs disappeared, I took a massive pay cut, went down to about $40,000 income. After taxes I made roughly *bills* every month, provided nothing went wrong (of course, things happened, so glad we had a cash cushion). That was a rough winter. We made it through it, wife got a job for around $26k salary so that really helped moving forward.
Fast forward and without the home value going up much at all we have about $80k in equity in the house over these years, by paying into the mortgage and paying more on top when we refi'd to a 15 year mortgage when things started stabilizing income and job wise.
Had we put more money down we would've been really up a creek without a paddle. I'm thankful for the low down payment programs, it meant we could get into a house we wanted to live in vs. settling for a neighborhood that was on the lower end side of things.
Rent slaves pay rent, thereby providing capital which landlords use to expand their portfolios.
did you think landlord capital comes out of thin air?
I think you are completely confused about what "capital" is.
Some landlords make little profit on their rentals, so no capital there. And they had to have capital to buy their first property, so paid rents didn't help them there.
Again, you paying rent is NO different than your employer paying your salary. That's where a lot of business owners get their capital.
I was not in any position to have credit, so I considered any ding quite irrelevant to my credit position.
My goal was to prove myself right - and the offending mortgage telemarketer wrong - that I couldn't qualify for a mortgage at a time when the ability to fog a mirror was said to be sufficient.
I think you are completely confused about what "capital" is.
Some landlords make little profit on their rentals, so no capital there. And they had to have capital to buy their first property, so paid rents didn't help them there.
Again, you paying rent is NO different than your employer paying your salary. That's where a lot of business owners get their capital.
I think you are using capital as a synonym for money. While that is used like that at times, in economics, capital is generally thought to be an asset that can be used to generate money. Examples are a factory, a patent, a stock holding, or a real estate holding.
A landlord's capital is the unit he is renting. He likely had to have had money to buy his first rental, but not always. Rents provide income. Property tax, mortgage interest (if any), repairs, etc, are expenses. Income minus expenses are profit.
When capital is sold, a capital gain or capital loss may be realized if the cost basis is less or more than the sales proceeds respectively. If the capital was subject to depreciation, part of the gain may be subject to depreciation recapture.
I think you are completely confused about what "capital" is.
Some landlords make little profit on their rentals, so no capital there. And they had to have capital to buy their first property, so paid rents didn't help them there.
Again, you paying rent is NO different than your employer paying your salary. That's where a lot of business owners get their capital.
I think perhaps I was trying to be a wiseguy once too often.
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