Mini Dave's Quest to be mortgage free!

setmefree2

Imho it's really bad to have tax relief associated with mortgages. There is no incentive to get rid of the mortgage/debt as it's not tax efficient to do so. Personally, I'd rather have less tax on my pay...

StuartGMC

SMF2
I was not commenting on the concept, just seeking to understand how it may impact the consideration as the US tax system is so different to ours.

BTW: personally I'd like to be able to afford an account who can ensure I avoid taxes altogether, but alas I'm not a retired bank chairman!

Tesco_points_addict

Hi Dave
Just wanted to say welcome and good luck

TPAxx

MoneyQueen

Hi

Welcome and Good Luck

Smithills

Welcome Mini-Dave! I'm a lurker, rather than a committed OP-er (extra £100/mo at the mo, yay for trackers!) but nice to see you here posting, not lurking (like me ). Welcome to the MFW Boards! Where are you in the US?

Cheers
Smithills

george_jetson

StuartGMC wrote: »

BTW credit cards aren't all bad if you treat them like charge cards and get the capital to work for you in the meantime

+1

A cc compliments an offset mortgage perfectly if you clear your balance in full each month - and if you can get a cashback cc so much the better.

setmefree2

StuartGMC wrote: »

SMF2
I was not commenting on the concept, just seeking to understand how it may impact the consideration as the US tax system is so different to ours.

BTW: personally I'd like to be able to afford an account who can ensure I avoid taxes altogether, but alas I'm not a retired bank chairman!

Sorry, I realised you were making a good point;). I was just saying that I think that tax relief that encourages people to stay in debt is a bit mad:rolleyes:

Wanna_Be_Mini_Dave

My mortgage terms: It's ammoritzation rate is 15 years. There is no prepayment penalty. And my interest rate will always be 6.25% no matter what.

In regards to the "tax deduction:" Yes in America we get to write off our interest payment off of our gross income. So in real terms that changes my mortgage to ~3% and adjust my savings rate to 2%. So it'd still be more beneficial to pay off my mortgage. Also in 2011 it looks like President Obama is going to get rid of the tax deduction all together.

*Not for the reasons stated on this board, but to continue his war on the wealthy (which in his eyes I'm apart of) sorry, I'll try to leave politics at the door but that new policy really bugs me.

Wanna_Be_Mini_Dave

Ok, I just did some research on the situation in the UK and now I understand why everyone is asking me questions about saving vs. paying off the mortgage (interest rates that is)

Long story short, the situation in America is much different. It's impossible to make paying extra on your mortgage unwise (saving rates are ALWAYS lower then mortgage rates even if you factor in taxes...unlike the UK where the reverse can be true)

Also in regards to the question, if I overpay can I get the money out later? It is EXTREMELY easy to refinance and pull that money out in America. Getting a "home equity line of credit" is easy. The only big downside is I'd have to pay a higher interest rate. So if I pulled that money out by getting a HELOC I'd probably have to pay 8.5% up to 10.5%. So I guess that'd be the "penalty" for overpaying too much and later regretting it.

Wanna_Be_Mini_Dave

So I've read a few other people's post about how much interest they pay daily/monthly and I decided to do the same. I would just like to say WOW!!:eek:

$35.21 daily

$1056.32 monthly

That's a lot of money that I could be saving!:eek: