mortgage, what mortgage?

[lets-retire]

CONGRATS!!

I thought it was interesting. A couple months ago my BIL and SIL were looking at buying the trailer they rent from my FIL. My BIL was saying he wanted to get it paid off as soon as possible, just because he didn't want to have the hassle of making monthly payments. The MIL stepped in and told him it was very stupid to pay it off, because the interest will lower his tax bill. I pointed out that yes it would work to lower the tax bill, but he would have to spend $100 to save $15, so it wasn't very economical and boiled down to who he'd rather pay. The MIL has very strong opinions and a rather heated discussion ensue. No tempers flared just a really good debate. I left the debate thinking it was over. We have lunch at the in laws every Sunday. While eating lunch recently the FIL pointed out he did his taxes with and without the mortgage and found the mortgage was saving him $400 per year in taxes. So of course my next question was, "How much are you spending to save that?" The answer was, "Over $700 per month." (but I believe the amount was his whole mortgage payment). Since he only bought his house a couple years ago, most of the payment is probably interest, since he is a recent convert to having the thing paid off.

[ikubak]

Originally Posted by lets-retire

CONGRATS!!

I thought it was interesting. A couple months ago my BIL and SIL were looking at buying the trailer they rent from my FIL. My BIL was saying he wanted to get it paid off as soon as possible, just because he didn't want to have the hassle of making monthly payments. The MIL stepped in and told him it was very stupid to pay it off, because the interest will lower his tax bill. I pointed out that yes it would work to lower the tax bill, but he would have to spend $100 to save $15, so it wasn't very economical and boiled down to who he'd rather pay. The MIL has very strong opinions and a rather heated discussion ensue. No tempers flared just a really good debate. I left the debate thinking it was over. We have lunch at the in laws every Sunday. While eating lunch recently the FIL pointed out he did his taxes with and without the mortgage and found the mortgage was saving him $400 per year in taxes. So of course my next question was, "How much are you spending to save that?" The answer was, "Over $700 per month." (but I believe the amount was his whole mortgage payment). Since he only bought his house a couple years ago, most of the payment is probably interest, since he is a recent convert to having the thing paid off.

No use arguing with a MIL that knows it all. Hopefully you got through to the FIL.

[myself]

Originally Posted by lets-retire

CONGRATS!!

I thought it was interesting. A couple months ago my BIL and SIL were looking at buying the trailer they rent from my FIL. My BIL was saying he wanted to get it paid off as soon as possible, just because he didn't want to have the hassle of making monthly payments. The MIL stepped in and told him it was very stupid to pay it off, because the interest will lower his tax bill. I pointed out that yes it would work to lower the tax bill, but he would have to spend $100 to save $15, so it wasn't very economical and boiled down to who he'd rather pay. The MIL has very strong opinions and a rather heated discussion ensue. No tempers flared just a really good debate. I left the debate thinking it was over. We have lunch at the in laws every Sunday. While eating lunch recently the FIL pointed out he did his taxes with and without the mortgage and found the mortgage was saving him $400 per year in taxes. So of course my next question was, "How much are you spending to save that?" The answer was, "Over $700 per month." (but I believe the amount was his whole mortgage payment). Since he only bought his house a couple years ago, most of the payment is probably interest, since he is a recent convert to having the thing paid off.

What's wrong with spending $7,000+ if you can "get back" $400.

[Rich]

It really does make good financial sense to get rid of the house payment. But, as I am sure most folks here realize, there is a strong culture out there the “get a tax write–off.” My wife and I have no debt. We’ve always been a bit conservative, in a Dave Ramsey sort of way. So, while I continue to work (because I want to), I don’t have to. It is really remarkable how comfortably one can live in this country on a good salary if one has no debt.

Rich

[FinanceDude]

Originally Posted by Rich

It really does make good financial sense to get rid of the house payment. But, as I am sure most folks here realize, there is a strong culture out there the “get a tax write–off.” My wife and I have no debt. We’ve always been a bit conservative, in a Dave Ramsey sort of way. So, while I continue to work (because I want to), I don’t have to. It is really remarkable how comfortably one can live in this country on a good salary if one has no debt.

Rich

Gotta agree on that......working on it.........

[bbbamI]

Originally Posted by FinanceDude

Gotta agree on that......working on it.........

That's why you're a finance dude. ...

[lucija]

Originally Posted by Rich

It really does make good financial sense to get rid of the house payment. But, as I am sure most folks here realize, there is a strong culture out there the “get a tax write–off.” My wife and I have no debt. We’ve always been a bit conservative, in a Dave Ramsey sort of way. So, while I continue to work (because I want to), I don’t have to. It is really remarkable how comfortably one can live in this country on a good salary if one has no debt.

Rich

So true... having no debt is very liberating!

I am, too, amazed how prevalent is the "get a tax write-off" or "I am using someone else's money" mentality.

Case and point: my neighbor told me yesterday he does not understand why one would chose to pay cash for a car (with funds from the savings account) when a bank is willing to lend you money with a 5 year re-payment plan. Hmmmm... call me crazy, but isn't there this little thing called "loan interest" (he was not talking about no interest loans).

[aida2003]

Congrats!!!
After reading this or similar threads I feel my motivation to pay off our mortgage reinforced over again vs. investing all extra $$ in the market (BTW, we invest quite a bit in taxable accounts already). Especially makes me happy hearing that even young people do that. We're 33 and 39 and are debt averse as well.

Our plan is to pay our 15-year mortgage off in 10 or preferably 7.5-8 years. This year considering current CD rates we're leaning to chop our savings (that are sitting in CD's and saving account) and apply a good chunk of it towards the principal. If we do this, we'll have our house paid for at the end of 2010. First we'll wait for the baby that's due in August. If he/she is good and healthy (I pray for that in my mind ), we'll make the step.

[DAYDREAMER]

Congratulations on your major accomplishment. Being debt free is an awesome feeling. If I were you, I would announce it to the world. It is an accomplishment many poeple don't even think about till somebody actually does it. My brother-in-law saw the light when he found out we payed off our house. He never thought of such a thing. He decided it was a noble goal, and did the same. By announcing your accomplishment, it may inspire others around you!