What are the tax benefits of being debt free (mortgage)?
147943
Too many people confuse the tax deductability of mortgage interest with being a huge benefit that one should keep.\n\nYou are always, always, **always** better off not to pay the interest in the first place, whether it is tax deductable or not.\n\nMany people also ignore the fact that if you don't itemize, you still get the standard deduction even if you don't have a mortgage. This new standardized deduction will replace your itemized deduction making the loss of the deduction that much less noticable.\n\nSo do it, and congratulations!
726088
You can deduct state, local, and foreign real estate taxes on ALL real estate you own.\n\nYou can deduct mortgage interest on ANY two homes you own.  You can only deduct mortgage interest on the first $1 million (total) of loans used to buy, build, or improve your home and only on the first $100,000 of other mortgage loans (home-equity).  If you think you may be over these amounts, or if you want to investigate further, I suggest reading the attached publication from the IRS.
1110032
I don't know the exact situation in Canada, but in general, the taxes there are higher to support the government programs, such as health care.  Giving the citizens a break on mortgage interest would lower their income and that's a source of revenue that they don't want to lose.
769918
Apparently some mortgages are now based on affordability, ie you show them what all your outogings are and they assess what you could comfortably pay. So if you're single and don't have children, you might be given more. Also if you have no other debts this will help too.
858540
homestead exemption is available to owner/occupants and reduces the taxable value of your home.  one time filing is good for as long as you live there and is only good on your primary residence.  not sure what a mortgage exemption is
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!
2800
I just asked myself this question a couple of months ago. I ran a spread sheet with a side by side comparison of my 6 1/2% 30 year mortgage versus an equal dollar amount invested at 5% for the same term. You would expect to save quite a bit paying off the debt but you actuality save by keeping the mortgage.
356984
You can find benefits here.\n\nhttp://www.mybenefitsplus.com/40374893
566339
You can split your new mortgage into two loans.\n80% on the first and 5% on the second.\n\nOR\n\nSome lenders offer TAMI (Tax Advantage Mortgage Insurance) where you pay a slightly higher interest rate but there is no added PMI to your monthly payment. Since Interest is Tax deductible and PMI is not, you will have more to write off.\n\nA good lender will be able to show you the options available.
350612
The interest that you pay on your mortgage is tax deductible.  I would pay the mortgage off last.  If you have any credit card debt pay that off first.  Then if you are not maxing out retirement savings, put the $50 a month into a Roth IRA for yourself.  If you still have some extra money than dump it into a 529 ( http://www.529s.com )
753543
I'd say the most important thing is to get any outstanding debts paid off first if you can.  That will then obviously reduce your total monthy payments and then may give you a change to get a mortgage with less monthly payments or one for more money.
888609
Before you pay off your mortgage, please double check the copies of the original documents. More than likely, your accountant did this, but just to be safe, I recommend double checking them. The reason I say this is because even though the prepayment penalty may be illegal, unrecognized, or whatnot, in your state, if you agreed to one on your Mortgage/Deed of Trust or your Note, you are liable for that prepayment fee. It isn't often that you see this, mostly lenders will do it if they think the loan is risky. But my opinion would be that if your accountant suggested paying this off, then it is in your best interest. You will lose the interest deduction on your taxes, but it's possible that you're at a point where it won't make that big of a difference to you financially. Though that is a question that you may consider running by your accountant. Good luck and congrats on being able to pay off your mortgage!
1033389
Here we go...\n\nThe thought of adding to the principle, reducing your loan term was a thought that originally spawned from the time of the great depression. At that time, banks (mainly local) had the ability to recall notes at any time they felt, whether you where in default or not. Sooooo, what they did when they needed money was started to take back the money they had lended out to borrowers by way of recalling the notes to properties. Leaving many Americans in the streets. This spawned hysteria in the American Psyche.\n\nThe thought of "Mortgage = bad" has been etched in our heads from the passing down of generations ever since. From this, I can tell you it's not logical thinking... WHY???\n\nYou see, lets say you take out $100k from the equity in your home and put it in a long term CD earning you 8% (very easy in todays market) and it compounds annually. However you have a loan on the property (interest only) at 6%, the intitial thought is you are going to yeild 2% on your money in a positive. NOT TRUE! you are going to yeild much more than that because the money in the CD is compounded on an annual basis and the interest paid on your home is simple interest. So, in essence you are going to reap the tax benefit of having a mortgage and you are going to be compounding the interest in the long term CD every year...\n\nEx:\n\n100k x .08 = 8,000.00\n108k x .08 = 8,640.00\n116,640.00 x .08 = 9,347.20\n125,987.20 x .08 = 10,078.98\n136066.18\n\nYou see wher I'm going with this. After only 4yrs you have made 36,066.18 yet you have paid 24,000.00 in interest to you existing 100k mortgage! Multiply the 24k in interest on your mortgage by 35% (general tax break offered for middle class on interest to a home) and you have really only spent 15,600.00 to make 36066.18.\n\nThis is the first four years. Keep compounding the interes for 20yrs and you will be 100's of thousands of dollars ahead.\n\nIt's called hedging, it's what the wealthy have been doing for years and years, using other peoples money to make them more money. It's the main reason why the rich get richer and the middle class never accel past middle class.
170321
There are a few ways to have your mortgage paid off, none that are easy or worthwhile imho.  For instance, many insurance policies will pay out for permanent disability by picking up your mortgage payments.  Of course, the permanent disability would be a downside and you know it would be contested by very expensive lawyers.
666715
First, it is not always optimal for you to pay off your mortgage. It is one of the few non-recourse loans available to you, and that lets you keep the upside while giving the bank the downside (they get the house, but nothing else if things go bad). \n\nAlthough I do not recommend negative amortizing loans, I would recommend that you change your goal of "paying off your mortgage before retiring" to "maximize my after tax wealth." Depending on your real estate market, and the interest rate on your loan (after tax interest rate of course), etc, it may be optimal to take the equity out, invest it in a way such that you can still draw from it to pay the increased mortgage payments... (i.e. do not use the extracted equity to buy a new Porsche).\n\nAdditionally, make sure that BEFORE you do teh 403b (unless they match in which case do the minimum required to get the match asap!), take advantage of the ROTH IRA. It has many advantages over a traditional IRA (untaxed at retirement, no required distributions at retirement), and the only disadvantage I can think of is the fact that you don't get the tax deduction today (although even this one is not entirely true depending on your income level). However, if you assume that tax rates will be higher at retirement (we all want to retire rich, right?) then the ROTH dominates teh traditional. Also, income tax rates are at historically low levels today, I'm assuming that our trade deficits and national debt levels will require increased taxes in the future... the ROTH is indifferent and protects you from such a development :)\n\nForget Universal Life. Start with Term, if you have a reason for life insurance at all. The rule of thumb would say that disability insurance makes more sense for younger workers than life insurance... Another rule of thumb: trust very few insurance salesmen, and those that you do trust almost always tell you that you need more than actual.\n\nBest of luck, hopefully this bit on personal finance helps.\nAs they say, it's just my $0.02!
723570
Mortgage life and disability insurance should answer your needs. I'm actually surprised that your mortgage lender wouldn't have offered it to you when you got your mortgage! They make good money on this kind of insurance, and generally there is some kind of incentive for the loans officer to encourage you to purchase it.\n\nAn option to consider is that you may be able to get life insurance on your mortgage cheaper by buying a term life insurance policy separate from your mortgage. Every time your mortgage comes up for renegotiation, you can reduce the amount of insurance that you are buying, and save yourself some money. This is different than mortgage insurance for which the premiums stay the same and are based on the original amount of the mortgage. The disadvantage is that the money is paid to your estate and doesn't automatically go against your mortgage. However, you would have assets in your estate this way to pay your mortgage and could leave instructions for that to happen with your executor or legal counsel. \n\nLife insurance obviously won't cover your mortgage in case of sickness or disability though. For this, you could consider a disability policy. This will allow you to be covered for more than just your mortgage -- it protects your income directly. In most cases, you can get a disability policy that will pay you 60% of your salary now. If you pay for it yourself, that 60% will be tax free (because you've paid for the policy with after tax dollars). In many cases, if this benefit is tax free, it will be sufficient for you to cover your regular expenses.
458072
As I say very often, be careful with who you are getting your answers from on this site....some of the answers that you have received are not exactly true.\n\nFirst, the advantage of the interest only loan is the fact that you will be paying less.  That has been established on here already.  Although whether the property is a rental property or the one you are living in really has no bearing on whether the loan is good or bad.  The person paying the mortgage back is going to determine that.  It does not matter what type of property is.\n\nAs far as qualification, yes, they are easier to qualify for.  NOT because you are only paying the lender their interest; but because your debt ratio will be lower than a normal type mortgage payment requiring Principal and Interest (P&I).\n\nThese loans are great for people that have investment properties and they need some flexibility; for people with high yeilding investments that they are investing the difference of the mortgage payments into...etc.  These loans are NOT for those wanting to qualify for more house.  There is not a more stupid move to make and if a lender or a salesperson is telling you this, run as far as you can cause they are misguiding you.\n\nIf you would like more information on these types of loans or others, please feel free to contact me at timothy.kazee@americanhm .com and we can talk more.  \n\nTim Kazee