I have a mortgage with $115,000 due at 6.3 percent. I can pay it off but do not know if i should. what is the rule of thumb in doing that and what are the tax implications. i am new here and not astute financially. thanks.
How are you financially with everything else? How are you paying this off? Do you have an emergency fund set up? Just curious. You must have discipline to pay this off. If you can pay it off and take your mortgage payment and invest it. I would set it up to automatically be taken out and put into an IRA or ROTH IRA, then I would pay it off immediately.
Remember, now that you won’t have the write off, you will have to pay taxes at the end of the year, so prepare for that. The amount of taxes that you will pay will be a lot less than the interest you were paying on the loan, so you will still be ahead of the game! Great going! I have a mortgage with $115,000 due at 6.3 percent. I can pay it off but do not know if i should. what is the rule of thumb in doing that and what are the tax implications.
You must have some idea of what you’re doing. I’d love to be able to pay off my mortgage (about $140K). If I had that money, I’d pay it off today.
Hi! I do believe the interest on a mortgage can be claimed on taxes. [(Disclaimer: I am not a tax expert. Consult your tax preparer for more details.) I put that in there because I got yelled at once about “false information” yatta yatta.] It also helps build credit. I would keep the mortgage and just pay a little extra off each month.
Especially if you are planning for retirement. Just have it paid off by then is what I’d do. Also maybe put some improvements into the house instead. Just in case you decide to move when you are in retirement. It would be like banking the money. Anyway, those are mainly just my thoughts.
Depending on the terms left in the mortgage, he could be paying twice the mortgage (or more) by the time it’s paid off. Instead, pay off the mortgage and put the money earmarked for payments in a tax-free interest fund. I thought the point of this group is to reduce debt.
I agree paying off debt is important…but if you dont have things in place before that you could be like alot of retirees who have paid for houses with no money..Thats why reverse mortgages are so popular with older folks..And reverse mortgages are a rip off.. You have to be smart in everything you do. Also thats’ why Dave Ramsey doesnt have the house being paid off until step #6. read more here – http://www.daveramsey.com/home/.
Paying OFF your mortgage is always better than taking the tax benefit. All you have to do to see this is figure out how much you are actually writing off at tax time, subtract that from what you’ve paid over the course of the year in mortgage payments and you’ll see that you are paying a bank money just to have some tax benefit.
I would suggest paying it off and if you are concerned about tax benefits, put more money into your 401K or IRA. Or, you could always use that extra money to buy yourself a rental home and increase your income. Just make sure that you can cover mortgage, taxes, and insurance on that next home.
I stick with my original response. If I could get rid of $140K in debt by paying off my mortgage this afternoon, I would do it. Dave Ramsey can afford to give any advice he wishes. He’s worth millions.