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Old 12-15-2018, 07:49 PM
 
8,145 posts, read 3,973,064 times
Reputation: 10920

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Quote:
Originally Posted by EmiSky View Post
That's why, I always try to add extra payments to my mortgages. In most cases, adding $200k extra to you mortgage payment will have greater impact in reducing your debt than adding $200 towards your credit card debt.

I'm not getting this either. Please show your scenario using identical apples. If you're trying to say that 15% of $15K is less than 4% of $320K, no sht shrlock.
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Old 12-15-2018, 07:53 PM
 
8,145 posts, read 3,973,064 times
Reputation: 10920
Quote:
Originally Posted by EmiSky View Post
I was replying to someone who stated s/he would rather pay down higher interest rate credit card vs. lower rate mortgage. My opinion is that I'd rather focus paying down my mortgage vs. higher interest credit card as I will be saving money.

I think maybe I see what you're getting at, if you're talking about a one-time payment. Yeah, reducing a $320k balance at 4% by $200 will save much more over the course of 30 years than reducing a $15k balance at 15% by $200 will save over 5 years because you have that balance riding another 25 years. But if you're making recurring payments you can reduce the high interest cc first then start applying to mortgage. Or if you amortize over the same time period it will be better to apply to the higher interest balance.
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Old 12-15-2018, 08:12 PM
 
89 posts, read 29,976 times
Reputation: 108
Quote:
Originally Posted by oceangaia View Post
I'm not getting this either. Please show your scenario using identical apples. If you're trying to say that 15% of $15K is less than 4% of $320K, no sht shrlock.
You're obnoxious!
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Old 12-15-2018, 08:51 PM
 
Location: Sugarland
13,354 posts, read 12,026,696 times
Reputation: 15577
PMI isn’t that big of a deal. Many people who can comfortably afford to pay PMI might not ever get a house if they’re waiting until they’re able to put 20% down.
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Old 12-15-2018, 11:54 PM
Status: "To to to Tuuuuuson..." (set 14 days ago)
 
Location: in my car
3,327 posts, read 1,327,550 times
Reputation: 8551
Quote:
Originally Posted by rummage View Post
Interest on a mortgage is tax deductible while interest on a credit card is not. Plus, interest rates on a mortgage are 4-5%, while a credit card is much higher and they don't amortize loans like mortgage companies do.
I think the new tax structure did away with mortgage deductions in favor of a higher overall deduction. I don't have a mortgage, so I benefit,but you might want to check out how it will affect your taxes.
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Old 12-16-2018, 01:16 PM
 
Location: Raleigh NC
8,104 posts, read 6,390,421 times
Reputation: 7149
no, it did not.

yes, there's a limit on mortgage interest that few people will ever see.

it's the $10K cap on deductibility of state and local (property) taxes that will have an effect.
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Old 12-16-2018, 03:57 PM
 
742 posts, read 167,503 times
Reputation: 1473
Quote:
Originally Posted by Japanfan1986 View Post
Thanks so much for the info. So a mortgage modification sound like it would be much more preferable. If I’m understanding you right then with a mortgage modification you keep the same lender and it’s just a matter of changing your payment amount and the interest rates, etc. that go with it. With refinancing you’re changing your lender completely.
Yes, that's correct. You can refinance with the same lender and not change at all.

So the questions to ask the lender are things such as:

Quote:
If I get a mortgage with you, would my loans be available in the future for a mortgage modification, so they you can change the length (years) and interest rate of the loan as it is offered?

Do you keep the loans, or do you sell them?
Some don't intend to keep the loans. They process the loans and then look to sell them. They could be telling you the truth that they keep all the loans and the mortgage modification will be available, but they could merge or sell in the future with another lender. How you will know if they sell your loan, is you will get a notice that you no longer make payments to their mortgage company, but a new one. Those loans sold honor the original terms, but they may not offer mortgage modifications.

Also, always have your real estate attorney review the loans you do, to make sure you aren't getting into something unexpected. Another thing, when looking for a mortgage, if they refuse to tell you what the APR will be for the loan to close claiming they won't know until you get to closing, find another lender. Because that's a very bad practice they do to squeeze people into bad loan situations.

I remember one mortgage company refused to tell me what their APR interest rate was over the phone and said I needed to apply. And the loan officer started to launch into some story about how "you have to understand how APR works..." and after a few minutes of this I said, "Are you going to tell me the APR interest rate?" and he said "No". I said goodbye and find a better lender.
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Old 12-18-2018, 09:53 PM
 
3,391 posts, read 1,786,967 times
Reputation: 2863
20% is the minimum, the higher the better.
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Old 12-19-2018, 08:42 AM
 
Location: Cary, NC
32,055 posts, read 56,095,919 times
Reputation: 30721
OP....

Be careful where you get your financial advice.
None of these people know if you have two nickels to rub together after you make your monthly nut, but have the answers.

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Old 12-19-2018, 05:38 PM
 
Location: Phoenix, AZ area
2,969 posts, read 2,519,401 times
Reputation: 3414
Quote:
Originally Posted by rummage View Post
Interest on a mortgage is tax deductible while interest on a credit card is not. Plus, interest rates on a mortgage are 4-5%, while a credit card is much higher and they don't amortize loans like mortgage companies do.
If you itemize and the majority of people don't itemize, less than 30%. After the tax overhaul you are going to see even fewer people itemize in the future, the estimate is around/below 10%. For a married couple that's $24k in mortgage interest/medical bills/SALT which is going to be very difficult to hit.

Can we stop with these claims already? The majority of people can't actually wrote off mortgage interest.
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