“tax deductible interest”
LOL! Like it makes sense to spend $2000 a month to get a $500 a month tax deduction - d’oh
Imagine not having a mortgage payment and having that money to save spend or invest ... not to mention the peace of mind
I paid off the home mortgage the first chance I got, but I can understand why people choose to leave it out there. To me the more important goal should be putting yourself into the position to have the CHOICE to pay it off or not.
The actual choice you make may be a matter of taste or a flip of the financial market coin, but having savings on hand is truly valuable.
If inflation rears its ugly head(which is almost a near certainty), the interest rate on her mortage could be less than the rate of inflation and she would be able to invest her expiring cds at at rate exceeding her mortage rate.
Gee a reasonable person using common sense - too bad the guys in congress don’t have the same stereet smarts you have used to explain debt, cash flow and investing.
No kidding. And if the person in question is near retirement, they probably have very little interest to deduct anyway, since it gets front-loaded in most cases. If they are in year 20 of a 30 year, it mostly principal.
Not much thought on this one IMO. Pay it off.
“Imagine not having a mortgage payment and having that money to save spend or invest ...”
Well, if you have paid off the mortgage then you don’t have the money you used to do that for spending or investing. I certainly wouldn’t take out a mortgage just for the tax deduction - that’s letting the tail wag the dog - but the tax aspect is one aspect of the decision to consider, along with “peace of mind,” expected return on alternative uses of funds, etc.
This is called arbitrage. You make more than the cost of investing. Why pay off the mortgage?
Way agreed, you can recoup your CD money in 4 years while it would take 5.5 years to pay off at 2K a month. As far as the tax savings, you will not realize 6K off your taxes just off your gross income so even if you pay a little higher taxes it shouldn’t equal 6K.
On a 100K income with no other itemized deductions there is no extra tax savings because you would take the standard deduction.
The only logical portion of what you said is the part about peace of mind. The remainder is a fairly simple mathematical computation.