got a question, a supervisor at work said that he already has a 15yr mortgage and wants to refinance again for another 15yr mortgage since the interest rates are low right now and his monthly note will come down.... well i asked him it would be better to refinance but to keep paying the same monthly just for less years and pay off his house quicker, right? he said he does not want to pay it off too quick cause then he wont have nothing to write off (interest) during tax season? he is about 42-44yrs old, is that a smart move?

I myself think differently, my wife and I want to start on our own 10yr future plan..... meaning, right now we have a 20yr mortgage, and would like to save and pay off the house in 10yrs, i will be 38yrs old then and house would be payed off right when my oldest son will be in his senior year in high school, right in time to be able to pay for his college/university. this sounds real good but I have never thought about the whole tax deal with the mortgage interest, how much does that mortgage interest really help out at tax time? Im pretty sure school will is not cheap either, but would we be able to claim my sons college costs then? well, i thought we were doing a smart move by having our own plan, that way our kids will be out of college by the time we are in our mid 40's, meaning early retirement for us!! or am i too young to be thinking too far ahead?

what is yalls opnion?

 

i am glad you are thinking ahead i am proud of you.

the mortgage interest doesnt really help that much. its the children/wife deduction that helps a lot.

i let my ex claim our son, i claim all my mortgage interest, and everything else i can write off. last year i paid in over $15K in federal/state taxes.... only got back about $1650 combined. i had about 8-9K in interest, so i cant see where it benefited me that much.

 

IMO stick with your plan....get the house paid off early if you are able to!

 

boss came around the corner, didnt get to finish. LOL

compare a small payback from your writeoff to what you save on an annual house-note. you will save minimum 8k+ a year without a mortgage. also think about the equity you will have, if you ever did need to make a large loan again, god forbid something terrible happen that would require that... you could easily do it, with the equity from your house. if your debt to income ratio is too great, you cannot do this. with a mortgage against the home already, and not enough equity..you couldnt get money you may need.

a friend of mine had his child diagnosed with a serious medical condition that insurance just didnt cover all the expenses... luckily had his home payed down enough to get financed for what was necessary.

you are on the right path though man. definately. stay married and you will be one step closer to your goal. LOL divorce= broke again

 

This says it all.

 

Sounds like your CPA missed a few things. I file Single/Zero all year, paid just under 20K in Federal/State tax, paid 8k in interest on my morgage and am getting back 5K. I put as much as I can afford into my retirement which is tax deffered and helps alot for taxes.

 

I think your doing right by planning ahead... IMO you have a couple of options... Pay off the house, which is always a goood option... School is deductable as long as you spend more than 4-5k (i think) a year... I would say invest some money now to help pay for school, but with the market and econmy the way it is now, I would not suggest it, unless you invest in foreign companies or foreign mutual funds (China has some good mutual funds)...

 

planning is always a good idea even if its out a decade or two... the major question i didn't see or was hidden in talk was" can you gain/make more money with the deducted taxes in those last couple of years of the mortgage or can you make more investing or paying for other things like (child's college, child might need a newer vehicle if they are going far away for college, you and your wifes parents will be getting older will they need income help/supplement for health care/nursing home, retirement plans that you could start expanding your portfolio sooner so you can feel comfortable about retirement sooner, ) just some ideas you'll find more if you review things that are important in your life... also remember if you pay over that initial rate that excess payment takes off of the principal and no interest. so if you have a 20 yr rate and pay double the principle it will not take 10 yrs it will take less b/c the extra money will pay off the principle amount not interest like the initial payment is(does that make sense) just some food for thought..

 

not really, your not thinking right.
when you start paying on a mortgage most of your payment is intrest, very little is on the house, thats why when you clame on the intrest paid you get something back.
after paying a few years more of your payment is on the house and less is in intrest witch gives you less to file on at tax time.
refinancing right now and getting a lower rate can be a win or lose thing.
if you just started a mortgage then yes you may be able to knock a few thousand off, if your 5 or 7 years in to it then it would be stupid.
sure you may get a lower rate but you just added 5 to 7 more years of payments before you own your home.
then their is the equity catch you get cash back by refinancing.
lets say your home is valued at 50,000, 5 years later with payments made you refinance your home with 40,000 left on it, and it is up in value at 65,000, sure you can get 25,000 back by refinancing but you now have a mortgage for 65.000 plus interst for the next 15 years at a lower rate when you were at 40,000 and ten years to go.

now a smart person, would take thier tax return and put it on their home every year as a baloon payment, by doing this you can pay off your mortgage in half the time.

 

x2 with this said..... always pay anything off as quick as you can say a loan for 1yr pay it off in 6 months..... i live with my parents and were on our 3rd house we built this one but there is 2 houses on the land with 50 acres and 2 sheds and a barn our house cost 500k 4 bed room 2 bath with upstairs and 2 car garage.. we have lived here for 14 yrs i believe but its already paid for everything they own is paid for truck 2 cars a tractor... all my dad does is put money back he is tight as **** my parents put back 8k a month and it takes 3k to run all of this a month... always pay what you have off as quick as you can to get out of debt but when he finds something he wants to buy he buys its and when he drops money on stuff he drops it like 10, 20k and so forth like it was nothing but he mainly pays it off with cash and dont wont any bills....