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Nope...it's cheap money, and a tax deduction... :thumb:
 

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Discussion Starter #6
Baketech said:
Nope...it's cheap money, and a tax deduction... :thumb:
I was thinking about that too. I'm thinking about letting the wife stop working because of health issues. With one income I could cut one major bill.
 

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I'd do it...and will as soon as possible. The saved interest would take care of any tax break many times over.

A smart investor with a low mortgage interest rate might do better to not pay off the home, but that ain't me.
 

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With the interest rates you can get right now (well, could get a few months ago), you will make far more money over time investing the cash and on tax breaks than you would save paying off the house.
The only time I paid off properties was when I sold them.
Real estate is somewhat of a hobby of mine, and the only reason to pay off your home is if you have an interest rate over 7% - and if that is the case, you should have refinanced already.
 

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No. It wouldn't be financially responsible. If you pay off your debt load at 4.4% instead of using that money to earn 20%.... Just doesn't make mathematical or financial sense at this time.
 

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Well, it all depends on the after-tax risk-adjusted expected return of your alternative investments. If you think you can get better than the after tax-deduction rate on your morgage, then invest, don't repay.

Most investment people are down to expecting returns before tax of 5-6% long term from US equities, so not much hope there.

You thought about hedge funds :rotfl: ?
 

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I'd pay off as many debts as possible, great feeling not having anything owing to anyone. That would out weigh any relative financial win for foucusing on a high gain investment. Last time I experienced that feeling was right before I bought my first bike. :D
 

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coderedcbr said:
I was thinking about that too. I'm thinking about letting the wife stop working because of health issues. With one income I could cut one major bill.
It's the wrong one to cut. If you are in that financial position, you should be using a home equity line to finance the others....
 

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TraumaOne said:
MOrtgage interest is tax deductible... next best thing to kids :D
In the UK mortgage payments are not tax deductible but it's the only investment asset you don't have to pay capital gains tax on. We also pay inheritance tax, all at your marginal rate of tax which is 40% if you earn over U$55k pa. We've had a price boom over here which is just starting to tank as interest rates rise. So here, I'd say sell the house and rent.
 

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oldfogey said:
In the UK mortgage payments are not tax deductible but it's the only investment asset you don't have to pay capital gains tax on. We also pay inheritance tax, all at your marginal rate of tax which is 40% if you earn over U$55k pa. We've had a price boom over here which is just starting to tank as interest rates rise. So here, I'd say sell the house and rent.

Remember that it was the UK's taxes that Americans were rebelling against. :p

To the subject: Most have said it already, but maybe I can explain it differently: You have limited funds, let's say $100,000. You can:

a) Pay off your house which is currently at 6%
b) Take your chances in the market which currently is doing nothing.

Given the current climate, I'd go w/ option A. Money in your house is money in the bank. Yes, you loose the tax deduction, but there is no way that that will be more than you would pay in interest on the loan. Well, I guess there is a good chance, but that is something you need to figure out.

My .02 is that you can pay the house off. Then you have all that disposable income to invest/save if you choose. If you need to finance, a home equity loan will be tax deductible.

HD
 
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