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Old 06-06-2014, 12:14 AM
 
10,812 posts, read 8,054,817 times
Reputation: 17010

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Quote:
Originally Posted by GLS View Post
The point of my original response post was to illustrate that the psychological benefit for ME PERSONALLY of owning a home free & clear was worth the tax trade-off.
Yep. We were happy to be done with it forever, never gave a second thought to looking for somewhere else to burn $.
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Old 06-22-2014, 12:46 PM
 
Location: Southwestern, USA
15,350 posts, read 12,109,955 times
Reputation: 16597
Ok, this is the group to ask...

You have $10,000 left, are 62, no one to leave your house to...all dead...just friends
with money...plan to live into 80's....what about a Reverse Mortgage?
Assuming they give you less than what the home is worth even...wouldn't it be great
to have "them" buy my house and me enjoy their payments over 20-25 yrs?

Drawbacks to that? I'm not seeing them?
Thanks for any help.
I'm a bit psyched to have "them" buy my house from me slowly even below market value.
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Old 06-22-2014, 01:45 PM
 
Location: SoCal desert
8,093 posts, read 13,223,984 times
Reputation: 14870
Quote:
Originally Posted by Miss Hepburn View Post
Ok, this is the group to ask...

You have $10,000 left, are 62, no one to leave your house to...all dead...just friends
with money...plan to live into 80's....what about a Reverse Mortgage?
Assuming they give you less than what the home is worth even...wouldn't it be great
to have "them" buy my house and me enjoy their payments over 20-25 yrs?

Drawbacks to that? I'm not seeing them?
Thanks for any help.
I'm a bit psyched to have "them" buy my house from me slowly even below market value.
The younger you are when you apply - the less money they give you.
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Old 06-22-2014, 04:20 PM
 
Location: Haiku
4,056 posts, read 2,566,050 times
Reputation: 5975
We moved when we retired which involved buying a new house and selling the old one. But there was a gap between those, so we had to take out a 5 year loan on the new house until we sold the old one. But when we sold, the stock market was doing so well I invested the proceeds rather than pay off the 5-year loan. We have been paying 3% interest on the loan, but making 15-20% on the market. Eventually the market will cool off and then I will repay the loan.

Moral of the story: It is not always a good thing to pay off a mortgage.
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Old 06-22-2014, 07:43 PM
 
Location: Bend Or.
1,126 posts, read 2,456,760 times
Reputation: 948
We will take out a mortgage a year after retirement. Most of our retrirement savings is in taxable accounts, IRS'S 401K's etc. We plan on building a new home and will spend a lot more than the equity in our old one. Rather than pay astronomical taxes for the 2 year period of building the home, (start one taxable year end another) we will take out a mortgage, probably 10 year, and invest in a low risk investment. Although the investment income won't cover the interest, the interest deduction along with the lower tax bracket will more than make the difference.
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Old 07-29-2014, 01:36 PM
 
Location: High Cotton
6,131 posts, read 6,439,478 times
Reputation: 3657
Quote:
Originally Posted by biscuitmom View Post
Yep. We were happy to be done with it forever, never gave a second thought to looking for somewhere else to burn $.
Well put! They just don't 'get it' do they?

They are worried about replacing the tax deduction they've eliminated by paying-off their mortgage (as if that's a bad thing), which was say 25% of the full interest they have been paying on the loan. But they don't even realize that paying-off their mortgage will actually save them the remaining 75% amount of interest they've been paying (throwing away/burning) for their loan.

Interesting read: Flunked Math in the 3rd Grade
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Old 07-29-2014, 02:22 PM
 
13,040 posts, read 15,379,198 times
Reputation: 15265
We just paid off our mortgage recently, but honestly I hadn't noticed that the mortgage interest deduction gave us any big break on taxes. What I have done since paying of the mortgage is save more for retirement. We've paid off most of our debt, so hopefully we can put most of what both my husband and I make aside so we can retire sooner.
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Old 07-29-2014, 02:35 PM
 
Location: Sierra Nevada Land, CA
8,387 posts, read 9,131,891 times
Reputation: 13025
Quote:
Originally Posted by highcotton View Post
Well put! They just don't 'get it' do they?

They are worried about replacing the tax deduction they've eliminated by paying-off their mortgage (as if that's a bad thing), which was say 25% of the full interest they have been paying on the loan. But they don't even realize that paying-off their mortgage will actually save them the remaining 75% amount of interest they've been paying (throwing away/burning) for their loan.

Interesting read: Flunked Math in the 3rd Grade
I've never understood the logic of throwing away $1000 in order to save $300 in income tax.

Our house is paid for and if needed, we will do a reverse mortgage as a last resort.
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Old 07-29-2014, 02:38 PM
 
Location: High Cotton
6,131 posts, read 6,439,478 times
Reputation: 3657
Quote:
Originally Posted by luzianne View Post
We just paid off our mortgage recently, but honestly I hadn't noticed that the mortgage interest deduction gave us any big break on taxes. What I have done since paying of the mortgage is save more for retirement. We've paid off most of our debt, so hopefully we can put most of what both my husband and I make aside so we can retire sooner.
Good for you! Wise choice! With too many people money burns a hole in their pocket...and they wonder why they don't have adequate savings and investments for life's meaningful stuff like maybe retirement.


Last edited by highcotton; 07-29-2014 at 02:56 PM..
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Old 07-29-2014, 02:39 PM
 
Location: High Cotton
6,131 posts, read 6,439,478 times
Reputation: 3657
Quote:
Originally Posted by Mr5150 View Post
I've never understood the logic of throwing away $1000 in order to save $300 in income tax.
BINGO!
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