If the int. rates are the same & both are tax deductable, should I pay off a 30K Auto Loan or 30K 2nd Mort?
152569
Pay off the auto loan.  Cars are depreciating assets.  From the day you buy it, the car's value is on its way to zero. Your home is an appreciating asset so you can take more time to pay it off.  Why do you think that auto loans are so short term???  Have you ever seen a 30 year auto loan?? On an average car, if you didn't make any payments on the loan, you would owe more than the car is worth in 1-2 years.\n\nAs a rule of thumb, you borrow money on appreciating assets and pay cash for depreciating assets.
494588
That all depends on your financial situation, long-term goals, interest rate, etc...\n\nHere are some considerations:\n\n1) Your house is a LIABILITY - unless it puts money IN your pocket, it's a liability.  It's an asset on the BANK's balance sheet.  Tax write offs...sure, but look at how much interest you'll pay over the course of the loan.  Figure that you'll basically pay double for the loan.  If you can pay it off in 20 years vs 30, you'll save thousands in interest.  If you invested that into a mutual fund, real estate (rental property or buy/flip), you'd stand to make a lot more than a write off.\n\n2)  What's your overall debt situation?  Do you have lots of credit cards, loans, dept store cards, etc...?  If you can make the mortgage payments, and you have a lot of cc debt, it may make more sense to pay off the higher interest rate debt first.  \n\nConsult with a financial expert / tax expert etc... for specific advice.\n\nI would also point you to "Smart Women / Couples Finish Rich", by David Bach.  They are two books.  Great advice on money.\n\nI wish you Peace.
566899
while you might have some equity in the home based on home appreciation, you will have paid NOTHING towards the principal of the loan.  Five years can be a long time, but if you're careful and work the plan well this plan might work for you.\n\nPersonally, I prefer the fixed rate 30 yr mortgage.  After 5 years in my home, I have paid a bit on the principal, plus have built some equity in the home.  But, that's for me.\n\nTo answer the question about the interest.  Well, that's what you paid to the lender to service you with this loan.  In essence, it's gone -- all 5 years of it.\n\nBear in mind that such interest may be deductible from your income when you file your IRS return.  That might be a good thing.\n\nPlease go talk with some other bankers, financial experts, and accountants, and ASK, ASK, ASK.  They are used to it.
1039921
I am a mtg broker. I would do a fixed HELOC and combine all your debt into it. If you pay all your debt separate, you are paying interest on the cars, credit cards, etc which are NOT tax deductible. Your mtg debt is. \n\nCongrats on having your home free and clear!
1172090
You'll be subject to a 10% IRS penalty for early withdrawal from your qualified retirement plan, plus whatever penalties the provider of your plan has.\n\nSince interest on a mortgage is deductible, why not continue to carry the mortgage?  I advise against most other debt, but a mortgage, under the current tax laws, still makes sense for maximizing your dollars.\n\nGood question!
227945
get a 7/1 interest only ARM product. if you are planning on staying for 5 years, get the extra 2 year buffer. depending on your tax bracket, you may also want to buy down your interest rate. you can tax deduct it now and benifit by a lower payment.\n\ngood luck,\n\namir
67614
If you have a mortgage on your home you could possibly roll that high paying interest into your mortgage.  I'm not sure what a good rate is for personal loans, but with mortgages that's outrageous.  At least if you're able to consolidate that debt into your mortgage you can receive a tax deduction.
602154
3 years ago variable loans eg. 3/1 ARMs and 5/1 ARMS had a significantly lower rate than 30 year fixed rates. If you were going to stay in a home for 5 years or less, a 30 year mortgage was very expensive compared to a 5/1 ARM.\n\nWe are now in an interesting period where 30 year rates and adjustable rates are about the same, and in some cases, where the adjustable products are more expensive than the 30 year fixed.\n\nThe simple answer therefore (not knowing your credit situation and other factors), is go with a 30 year fixed. The rate is no higher than the adjustables and I personally believe mortgage rates are going to hit record highs in the next 4 years.\n\nThe only caveat to the above is if your credit score is below 620 and above 580. You will then qualify for a sub-prime loan. The rates on these loans are higher because of the lower credit score. In this case, the 2/28 ARM can be much cheaper than the 30 year fixed. This is a good loan if you don't have great credit, but want to buy a home.\n\nThe intent is that you will refinance it sometime in the next two years when your credit is better into a lower cost, 30 year mortgage.
989632
They should both be deductible. Both are 501 (c) 3 organizations.
846281
It is deductible:  I love this article that was posted on the bankrate.com site.\n\nHome sweet homeownership tax breaks \nBy Kay Bell • Bankrate.com   \n \n\nCongratulations, you've just taken another step up the American-dream ladder and are a homeowner. Along with the joy of painting, plumbing and yard work, you now have some new tax considerations.\n\nThe good news is that you can deduct many home-related expenses. These tax breaks are available for any abode -- mobile home, single-family residence, townhouse, condominium or cooperative apartment. \n\nThe bad news is that to take full tax advantage of your home, your taxes will likely get more complicated. You're not living on "EZ" Street anymore; you've moved to the 1040 long form and Schedule A, where you'll have to itemize deductions. \n\nFor many homeowners, the effort of itemizing is well worth it at tax time. Some, however, might find that claiming the standard deduction remains their best move. How do you decide? First, find your standard deduction amount, based on your filing status: $5,000 for single or married filing separately taxpayers; $7,300 for heads of households; and $10,000 for married couples who file joint returns. Then compare it to the total expenses you can itemize and file using the method that gives you the larger deduction.\n\nTo help you figure your possible Schedule A tax breaks, here's a look at homeowner expenses you can deduct, ones you can't and some tips to get the most tax advantages out of your new property owning status.\n\nMortgage interest\nYour biggest tax break is reflected in the house payment you make each month since, for most homeowners, the bulk of that check goes toward interest. And all that interest is deductible, unless your loan is more than $1 million. If you're the proud owner of a multimillion-dollar mortgaged mansion, the Internal Revenue Service will limit your deductible interest.\n\nInterest tax breaks don't end with your home's first mortgage. Did you take advantage of low rates and your real estate's growing value to pull out extra cash through refinancing? Or did you decide instead to get a home equity loan or line of credit? Either way, that interest also is deductible, again within IRS guidelines. \n\nGenerally, equity debts of $100,000 or less are fully deductible. But even then, the remaining amount of your first mortgage could restrict your tax break. This could be a concern if you excessively leverage your house. \n\nWhen a homeowner takes out an equity loan that, when combined with his first mortgage amount, increases the debt on the house to an amount more than the property's actual value, the homeowner faces additional deductibility limits. In these cases, the IRS says you can deduct the smaller of interest on a $100,000 loan or your home's value less the amount of your existing mortgage.\n\nFor example, you bought your home three years ago with a minimal down payment. Your mortgage balance is $95,000 and the house is now worth $110,000. Your bank says you qualify for a 125 percent loan-to-value equity line, or $42,500 ($110,000 x 125 percent = $137,000 - $95,000 left on your first mortgage). To pay for your daughter's college tuition and buy her a car to get to school, you take the bank up on the offer, thinking the interest deduction on the loan would be icing on the tax-break cake\n\nHowever, you're not going to get to deduct all that interest. Instead, your deduction is limited to interest on just $15,000 of the loan; that's the amount your home's value exceeds your first mortgage. Interest payments on the other $27,500 are not deductible, even though the equity line is secured by your home. So don't automatically assume you can deduct all interest on home equity debts.\n\n- advertisement - \n \n \nWhat if your real estate circumstances are a bit brighter? Say, for instance, you're able to swing a vacation home on the l
308494
Depends on what your goals are for the property in question. Are you looking to hold onto the property for an extended amount of time or looking to flip in 12 months? Are you looking for cash flow control, or do you want to know what your payments will be every month? How much are you willing to place down for the new property? \n\nMost lenders will require you to place down a minimum of 10% towards the property, meaning that you would receive an 80/10/10 loan. Your interest rate because of the fact that it's an investment property will vary from lender to lender, however it will be higher than an O/O property. Your second will be the killer for interest rate. Because your interest rate for the second will be outrageous, you might want to entertain the idea of MI, it might be less than the fully amortized amount of a second loan.\nAgain, depending on your time frame that you want to hold onto the property will determine the program that you enter. If you’re only looking to keep the property for 2 years, then there is no reason for a 30yr fixed program. However if you plan on holding it for 30yrs you might want to entertain an ARM to reduce your monthly obligations.\nThe Pay option ARM is very popular with investors since it allows them to control the cash flow of the payments. However it is a one month adjustable and they normally want a larger down payment. You would have to calculate your cash on cash return to determine if this is an option since you'll be placing down about 25% of the purchase amount. There is a formula you can use to determine cash flow /deferred interest and appreciation to determine how effective the program will be for you. Again, it really depends on a lot of factors as the investor that you need to decide and then find a vehicle that will assist you in reaching it. If you have any other questions, you can contact me directly.
366742
Just make the payments and it stays yours. Fail to do so and they will take your car, determine that it's not enough to cover the loan due to depreciation and then you will still owe them money! So pay it off! And if you do have a problem go to the bank and they might work with you by just letting you pay the interest for a month or two as it is cheaper for them to do so than reposses your car.
199653
it becomes your income for that year, so its added to your gorss income for tax purposes. having the employer paying the premiums doesnt make the difference.  was the loan more than the policy? what interest rate was charged on your 'loan'?  once you have the premiums cash in hand i think you should see an investment broker or such and get assistance on socking most of it away in to an rrsp or something so you wont be taxed to siberia on it.
917133
Since you're actually asking this question, I'm going to assume (dangerous thing) that you will be disciplined in your use of your dollars.....\n.... pay off the cars.  And don't go getting car loans any more.  Apply the extra $220 toward the 20% 2nd loan, and pay it off early.  Instead of re-financing, you'll just be left with the 80% loan at that point.\n\nInterest rates go up and down in cycles.  They've been at the bottom of the cycle for a good long time now.  In a few years, don't expect or plan on them being lower than today.\n\nGet the best interest rate you can on the 80% first, and plan on keeping that loan.  Pay off the 20% 2nd as fast as possible.
268529
Sure ya can re-fi!  Go ahead and shop around.  Just be careful, some bank's charge a fee if you pay off the HELOC early.  Just make sure it is not more then you are going to save yourself in interest.  You may be better of with a 2nd mortgage as opposed to a HELOC.  2nd mortgage rates don't tend to fluctuate as much, and some are even fixed.\n\nA personal loan is going to be at a MUCH higher rate since it is an unsecured loan.  You also can't write off the intrest you pay on your taxes.  Best bet would be to re-fi your HELOC.
360376
It really depends on the overall picture. The blended rate on 2 loans could be close to the one loan option, but with the 1 loan option you will probably pay Mortgage Insurance.\n\nThe rates on the 20% 2nd loans have really gone through the roof, so the 1 loan options are starting to look better again.\n\nAs far as closing costs, it really depends on the type of loan and the lender you are using.  The Bank that I work at charges very little on fees and we have no junk fees that I see other lenders use.  But being that their are 2 loans there are more costs than just one loan.\n\nYou should have your lender go over the difference in total monthly payments and difference in closing costs for the 2 options and see which one looks better.\n\nWith 2 loans, chances are you will want to refi or combine the 2 together within a few years if you have built up equity.  With one loan, if you are paying Mortgage Insurance, after 2 years if your value has increased, you may be able to eliminate the Mortgage Insurance and your payment goes down.  Not the case with 2 loans.\n\nS, look at the overall payments and costs and ask yourself if you plan on being in the same house or same mortgages for more than 2 years.
502213
If you are getting a higher interest rate from your IRA, then put your $ in to the IRA.  If the interest rate on the home loan is higher than the IRA, then put the $ on the home loan.  Which ever is going to return more $ to you.