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Mortgage interest ignorance #6724296
01/11/20 06:24 AM
01/11/20 06:24 AM
Joined: Nov 2012
Posts: 112
midland, michigan
M
midlander Offline OP
trapper
midlander  Offline OP
trapper
M

Joined: Nov 2012
Posts: 112
midland, michigan
Guess Ill never understand it. Have a buddy that has the ability and means to pay his mortgage off early and refuses beacause he'll lose his tax break. Try as I might, cant get it through his head that he is far better off without that 'tax break'..! Lenders have done a great job at brainwashing folks that mortgave interest is a good thing. He's not the only one with that warped thinking....but in the end, he earns his money and is free to spend it.

Re: Mortgage interest ignorance [Re: midlander] #6724300
01/11/20 06:29 AM
01/11/20 06:29 AM
Joined: Dec 2006
Posts: 15,747
williamsburg ks
D
danny clifton Offline
trapper
danny clifton  Offline
trapper
D

Joined: Dec 2006
Posts: 15,747
williamsburg ks
i would think 2 minutes with a calculater would show him what your talking about. your friend may have other reasons for not wanting to pay early. if you want a good credit score for example you need to be in debt and have a continuous payment history.


ban gun free zones
Re: Mortgage interest ignorance [Re: midlander] #6724303
01/11/20 06:39 AM
01/11/20 06:39 AM
Joined: Mar 2010
Posts: 874
Oklahoma
Blaine County Offline
trapper
Blaine County  Offline
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Joined: Mar 2010
Posts: 874
Oklahoma
Originally Posted by midlander
Guess Ill never understand it. Have a buddy that has the ability and means to pay his mortgage off early and refuses beacause he'll lose his tax break. Try as I might, cant get it through his head that he is far better off without that 'tax break'..! Lenders have done a great job at brainwashing folks that mortgave interest is a good thing. He's not the only one with that warped thinking....but in the end, he earns his money and is free to spend it.


I hear your buddy's reasoning all of the time. It makes zero sense to me.

Re: Mortgage interest ignorance [Re: midlander] #6724305
01/11/20 06:42 AM
01/11/20 06:42 AM
Joined: Dec 2015
Posts: 1,576
NNY
0
080808 Offline
trapper
080808  Offline
trapper
0

Joined: Dec 2015
Posts: 1,576
NNY
Danny is right. Amazing how people no longer want to sit down with a pencil and piece of paper. Seeing is believing.

Re: Mortgage interest ignorance [Re: midlander] #6724313
01/11/20 06:55 AM
01/11/20 06:55 AM
Joined: Dec 2010
Posts: 877
Wisconsin
G
Green Bay Offline
trapper
Green Bay  Offline
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G

Joined: Dec 2010
Posts: 877
Wisconsin
Getting out of all debt should be a major priority for every wage earner. As Dave Ramsey says "Debt is Dumb."

Re: Mortgage interest ignorance [Re: midlander] #6724317
01/11/20 06:59 AM
01/11/20 06:59 AM
Joined: May 2010
Posts: 23,720
potter co. p.a.
P
pcr2 Offline
"Twerker"
pcr2  Offline
"Twerker"
P

Joined: May 2010
Posts: 23,720
potter co. p.a.
i get a kick outta being a credit risk pretty much when we own a whole lot-debt free.not a bill late in forever.

no credit cards and over 20 yrs without a loan,little cash in the bank.

if Hillary was a banker,they'd be callin me Epstein.


quality over quantity

Hickory Garden Tradin Post

PA life #413
Re: Mortgage interest ignorance [Re: Green Bay] #6724334
01/11/20 07:23 AM
01/11/20 07:23 AM
Joined: Nov 2012
Posts: 112
midland, michigan
M
midlander Offline OP
trapper
midlander  Offline OP
trapper
M

Joined: Nov 2012
Posts: 112
midland, michigan
Agreed Green Bay

Re: Mortgage interest ignorance [Re: midlander] #6724339
01/11/20 07:33 AM
01/11/20 07:33 AM
Joined: Dec 2012
Posts: 3,722
Wi.
D
Diggerman Offline
trapper
Diggerman  Offline
trapper
D

Joined: Dec 2012
Posts: 3,722
Wi.
Is it possible that with the tax break, coupled with low interest rates, that his money is better off working for him in say the stock market or the real-estate market?

Re: Mortgage interest ignorance [Re: midlander] #6724352
01/11/20 07:54 AM
01/11/20 07:54 AM
Joined: Nov 2012
Posts: 112
midland, michigan
M
midlander Offline OP
trapper
midlander  Offline OP
trapper
M

Joined: Nov 2012
Posts: 112
midland, michigan
Folks have differing opinions on the stock market and investing, but I think it is safe to assume it is better than giving interest money to the bank.

Re: Mortgage interest ignorance [Re: midlander] #6724360
01/11/20 08:01 AM
01/11/20 08:01 AM
Joined: Jan 2010
Posts: 168
sw minn.
Flipper Offline
trapper
Flipper  Offline
trapper

Joined: Jan 2010
Posts: 168
sw minn.
Not always if you have4% interest and could make 10% on stock market (was easy to do with trumps market last 3 years) that equals a positive 6% in your pocket.

Re: Mortgage interest ignorance [Re: pcr2] #6724363
01/11/20 08:04 AM
01/11/20 08:04 AM
Joined: Aug 2016
Posts: 270
Pennsylvania
C
Claypool313 Offline
trapper
Claypool313  Offline
trapper
C

Joined: Aug 2016
Posts: 270
Pennsylvania
Originally Posted by pcr2
i get a kick outta being a credit risk pretty much when we own a whole lot-debt free.not a bill late in forever.

no credit cards and over 20 yrs without a loan,little cash in the bank.

if Hillary was a banker,they'd be callin me Epstein.


Ill be there with you in a few years. My mortgage is quite possibly my last loan ever and im only 41. Once it's paid in 4 years i only plan to make major purchases with cash. I do use a credit card but pay it off monthly. It's only for convenience. Im not sure how credit scores are calculated but if mine erodes away i couldn't care less. If something like insurance costs me more because of it, those might be fun conversations where i tell them i get the best rate or im out.

Re: Mortgage interest ignorance [Re: Flipper] #6724364
01/11/20 08:05 AM
01/11/20 08:05 AM
Joined: Nov 2012
Posts: 112
midland, michigan
M
midlander Offline OP
trapper
midlander  Offline OP
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M

Joined: Nov 2012
Posts: 112
midland, michigan
Flipper, why not pay off the mortgage and put 10% in your pocket...seems better than 6% to me.

Re: Mortgage interest ignorance [Re: midlander] #6724371
01/11/20 08:16 AM
01/11/20 08:16 AM
Joined: Sep 2010
Posts: 3,584
NC, Orange Co.
QuietButDeadly Offline
trapper
QuietButDeadly  Offline
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Joined: Sep 2010
Posts: 3,584
NC, Orange Co.
4% compounded on a long term mortgage is way more than 4% simple interest on something short term. Find the calculators and run the numbers on a 30 year mortgage and tell me the actual dollars of interest payed versus the principal. It ain't 4% for dang sure! Total interest is more than total principal.


Life Member: NCTA, VTA, NTA, TTFHA
Member: UTK GTA FTA SA NRA NWTF WFSC
Re: Mortgage interest ignorance [Re: midlander] #6724409
01/11/20 08:55 AM
01/11/20 08:55 AM
Joined: Feb 2014
Posts: 4,603
Ky
J
jbyrd63 Offline
trapper
jbyrd63  Offline
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J

Joined: Feb 2014
Posts: 4,603
Ky
Unless there is more to the story . It is easy to see if it is a benefit to paying it off. FIRST he has to know how much interest his is paying per year or he wouldn't know how " much " the tax break is. But he can't be gaining more as the tax credit isn't dollar for dollar. Second with taxes almost entirely done on a computer program it is as simple as changing the interest amount paid on the form and recalculating with ONE push of a button. Boom there is his answer...... ONLY reason I can think of is he doesn't have the "cash to pay it off".

Re: Mortgage interest ignorance [Re: danny clifton] #6724410
01/11/20 08:56 AM
01/11/20 08:56 AM
Joined: Nov 2010
Posts: 254
Iowa
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beeman Offline
trapper
beeman  Offline
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Joined: Nov 2010
Posts: 254
Iowa
Originally Posted by danny clifton
i would think 2 minutes with a calculater would show him what your talking about. your friend may have other reasons for not wanting to pay early. if you want a good credit score for example you need to be in debt and have a continuous payment history.


I have high credit score and have not been in debt for anything in past 20 plus years. A person can get a good payment history by paying his bills on time. Paying debt on time will help credit score, Iím just saying you donít have to go in debt to get good credit score.

Re: Mortgage interest ignorance [Re: Flipper] #6724413
01/11/20 08:58 AM
01/11/20 08:58 AM
Joined: Feb 2014
Posts: 4,603
Ky
J
jbyrd63 Offline
trapper
jbyrd63  Offline
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Joined: Feb 2014
Posts: 4,603
Ky
Originally Posted by Flipper
Not always if you have4% interest and could make 10% on stock market (was easy to do with trumps market last 3 years) that equals a positive 6% in your pocket.


LOL yea IF the dividend interest was compounded like the mortgage interest was . But for some reason the publics receiving interest is different then the publics paying interest.......
confused

Re: Mortgage interest ignorance [Re: midlander] #6724414
01/11/20 08:58 AM
01/11/20 08:58 AM
Joined: Jan 2007
Posts: 8,672
Georgia
warrior Offline
trapper
warrior  Offline
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Joined: Jan 2007
Posts: 8,672
Georgia
Not just mortgages. Just had a conversation with one of my daughters about payroll with holding and tax refunds. The moochers in DC have done one heck of a brainwashing job that has most folks believing it's okay to give away money all year long in the hope of being given some back.

Our tax code is written with this in mind.

Re: Mortgage interest ignorance [Re: midlander] #6724426
01/11/20 09:12 AM
01/11/20 09:12 AM
Joined: Sep 2010
Posts: 3,584
NC, Orange Co.
QuietButDeadly Offline
trapper
QuietButDeadly  Offline
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Joined: Sep 2010
Posts: 3,584
NC, Orange Co.
A personal finance course should be required for high school graduation. It should cover interest, simple and compound, simple stuff like managing your bank accounts and filling out routine personal tax returns. It is not rocket science but there is certainly no shortage of ignorance about managing ones personal finances.


Life Member: NCTA, VTA, NTA, TTFHA
Member: UTK GTA FTA SA NRA NWTF WFSC
Re: Mortgage interest ignorance [Re: midlander] #6724428
01/11/20 09:19 AM
01/11/20 09:19 AM
Joined: Jan 2009
Posts: 6,637
PA
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gryhkl Offline
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Joined: Jan 2009
Posts: 6,637
PA
We have had everything paid of for 10 or twelve years. Last spring I wanted my wife to get a new car. She decided to get a Subaru. We have paid cash for our last couple cars, but they were offering .9% interest on the loan. We put 5,000 down on the car, but that was dumb move on our part. We should have left the money in the bank, Even with CDs at today's rates we would have come out a little ahead.

Re: Mortgage interest ignorance [Re: midlander] #6724434
01/11/20 09:26 AM
01/11/20 09:26 AM
Joined: Nov 2010
Posts: 798
USA-WI
K
Kre Offline
trapper
Kre  Offline
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K

Joined: Nov 2010
Posts: 798
USA-WI
There can be several reasons to not pay off a mortgage early...Lots of variables.

I only have a few years left on my 15 year at 2.875%. I have no intention of paying any extra and put extra money to work in other ways.

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