Is it a bad decision to payoff mortgage early

[catlinhappy]

is not a bad decision at all because i did that some days ago.

[Mobius]

I was always under the thought the faster you pay it the more weight is off your shoulders so I don't quite understand why others are disagreeing.

because people think that investing the money instead of paying it back will yield a higer return than the 4.4%.

But those guys don't think about taxes and risk.

You only pay tax on gain. As for risk, you can always buy investment grade bond which offer higher than 4.4% yield.

Yah but you can't deduct the 4.4% you pay from your gains.... So if you only get 4.4% on your investment you will lose about ~25% (of the 4.4%) depending on where you live.

It is always better to have/make more money. Even if this means that you pay more in taxes, the net effect is that your bank account is larger, or you can spend more money on things you like.

[micky123]

Reply to OP: Always better to pay off any kind of Mortgage / Loans early if you have spare funds available. The last thing you should do is invest such funds into speculative opportunities (at least this is what i figured based on your question!)

I hate to have any kind of loan on my head and ensure that i pay off my loans well before they actually end! I do set aside some funds from my salary every month to invest in speculation though!

[jaberwock]

Sometimes is better grab business oportunities than quit debits. Most sucessful enterpreneurers made big loans counting only with the sucess of their projects and made good profits.

But if you have no investment plan, then better pay the mortgage

[sana8410]

just checked interest rate. 15y 0-point fixed mortgage rate is still at 3.4%, i thought it's risen to pretty close to where my rate was. now i feel better.

[Rigon]

just checked interest rate. 15y 0-point fixed mortgage rate is still at 3.4%, i thought it's risen to pretty close to where my rate was. now i feel better.

buy a more expensive house now. lol
but in general, if you're not investing your money and earning more than your mortgage rate, and factoring tax deduction savings.....then pay it off.

[sana8410]

just checked interest rate. 15y 0-point fixed mortgage rate is still at 3.4%, i thought it's risen to pretty close to where my rate was. now i feel better.

buy a more expensive house now. lol
but in general, if you're not investing your money and earning more than your mortgage rate, and factoring tax deduction savings.....then pay it off.

seriously, i'm planning to buy a more expensive house, probably somewhere in texas.
one problem seems to be that property sold prices are not public record down there, making me feel like walking into a minefield

[Rigon]

or rent it out and buy another house. I have a few friends who started doing that, and have since quit their jobs and do that as their sole source of income.

[umair127]

or rent it out and buy another house. I have a few friends who started doing that, and have since quit their jobs and do that as their sole source of income.

My brother does this. He specifically looks for houses on the city's vacant property list, finds the owner and makes them an offer. The city fines owners of vacant property, increasing every year it is vacant. By the time the house is vacant 5 years, it's $5,000 per year. And the city tacks on criminal penalties if it is not paid. So, the owners are usually thrilled to get an unsolicited offer. Many times he picks up the property for the back taxes and fees plus a paltry tip to the owner of $5,000-10,000. The best part is the city gives a 10 year full tax abatement for derelict properties and a 20 year abatement on improvements to vacant property -- 100% for owners who live in the property, 90% for owners who rent the property.

[sana8410]

or rent it out and buy another house. I have a few friends who started doing that, and have since quit their jobs and do that as their sole source of income.

how did they do during the recession?

they cant hire someone or their relatives to do the property management? doesnt seem like a full time job all the time .seems to be a solid source of income especially when this country is getting more and more crowded .

[Rigon]

or rent it out and buy another house. I have a few friends who started doing that, and have since quit their jobs and do that as their sole source of income.

how did they do during the recession?

they cant hire someone or their relatives to do the property management? doesnt seem like a full time job all the time .seems to be a solid source of income especially when this country is getting more and more crowded .

He did okay. I shouldn't have said it's his sole income, but it's definitely his primary income. I think he probably pulls three shifts part time at a gas station.

He started by buying one house and fixing it up. While renovating it he realized he could divide it into something for him, and a rental space. Eventually he found the second house he could do the same to, so moved out of his and rented it, moved into the beat-up house, and lived there while he renovated.

Now I think he has 10 that he rents out and an 11th that he lives in. 10 rental places keeps him pretty busy but hiring someone to manage it would kill his profit.

[Coinport Exchange Support]

Interest rates are low. Don't repay it yet.

[wzb422]

surely, u should keep the money and invest to earn more

[wenben]

or rent it out and buy another house. I have a few friends who started doing that, and have since quit their jobs and do that as their sole source of income.

how did they do during the recession?

they cant hire someone or their relatives to do the property management? doesnt seem like a full time job all the time .seems to be a solid source of income especially when this country is getting more and more crowded .

He did okay. I shouldn't have said it's his sole income, but it's definitely his primary income. I think he probably pulls three shifts part time at a gas station.

He started by buying one house and fixing it up. While renovating it he realized he could divide it into something for him, and a rental space. Eventually he found the second house he could do the same to, so moved out of his and rented it, moved into the beat-up house, and lived there while he renovated.

Now I think he has 10 that he rents out and an 11th that he lives in. 10 rental places keeps him pretty busy but hiring someone to manage it would kill his profit.

People who want to replicate his success can check out hudstore. Rental yield is well over 20-30% and possibly even more if you fix up the house yourself.

[sana8410]

or rent it out and buy another house. I have a few friends who started doing that, and have since quit their jobs and do that as their sole source of income.

how did they do during the recession?

they cant hire someone or their relatives to do the property management? doesnt seem like a full time job all the time .seems to be a solid source of income especially when this country is getting more and more crowded .

He did okay. I shouldn't have said it's his sole income, but it's definitely his primary income. I think he probably pulls three shifts part time at a gas station.

He started by buying one house and fixing it up. While renovating it he realized he could divide it into something for him, and a rental space. Eventually he found the second house he could do the same to, so moved out of his and rented it, moved into the beat-up house, and lived there while he renovated.

Now I think he has 10 that he rents out and an 11th that he lives in. 10 rental places keeps him pretty busy but hiring someone to manage it would kill his profit.

Are those 10 houses together in one place or one area or scattered?

[negafen]

or rent it out and buy another house. I have a few friends who started doing that, and have since quit their jobs and do that as their sole source of income.

how did they do during the recession?

they cant hire someone or their relatives to do the property management? doesnt seem like a full time job all the time .seems to be a solid source of income especially when this country is getting more and more crowded .

He did okay. I shouldn't have said it's his sole income, but it's definitely his primary income. I think he probably pulls three shifts part time at a gas station.

He started by buying one house and fixing it up. While renovating it he realized he could divide it into something for him, and a rental space. Eventually he found the second house he could do the same to, so moved out of his and rented it, moved into the beat-up house, and lived there while he renovated.

Now I think he has 10 that he rents out and an 11th that he lives in. 10 rental places keeps him pretty busy but hiring someone to manage it would kill his profit.

Are those 10 houses together in one place or one area or scattered?

Probably within driving distance based on his description.

[Rigon]

or rent it out and buy another house. I have a few friends who started doing that, and have since quit their jobs and do that as their sole source of income.

how did they do during the recession?

they cant hire someone or their relatives to do the property management? doesnt seem like a full time job all the time .seems to be a solid source of income especially when this country is getting more and more crowded .

He did okay. I shouldn't have said it's his sole income, but it's definitely his primary income. I think he probably pulls three shifts part time at a gas station.

He started by buying one house and fixing it up. While renovating it he realized he could divide it into something for him, and a rental space. Eventually he found the second house he could do the same to, so moved out of his and rented it, moved into the beat-up house, and lived there while he renovated.

Now I think he has 10 that he rents out and an 11th that he lives in. 10 rental places keeps him pretty busy but hiring someone to manage it would kill his profit.

Are those 10 houses together in one place or one area or scattered?

They're relatively close. I've only been to one, a three story house that he rents the first two floors and lives on the third. But they're all probably within a few miles of each other.

[sana8410]

or rent it out and buy another house. I have a few friends who started doing that, and have since quit their jobs and do that as their sole source of income.

how did they do during the recession?

they cant hire someone or their relatives to do the property management? doesnt seem like a full time job all the time .seems to be a solid source of income especially when this country is getting more and more crowded .

He did okay. I shouldn't have said it's his sole income, but it's definitely his primary income. I think he probably pulls three shifts part time at a gas station.

He started by buying one house and fixing it up. While renovating it he realized he could divide it into something for him, and a rental space. Eventually he found the second house he could do the same to, so moved out of his and rented it, moved into the beat-up house, and lived there while he renovated.

Now I think he has 10 that he rents out and an 11th that he lives in. 10 rental places keeps him pretty busy but hiring someone to manage it would kill his profit.

Are those 10 houses together in one place or one area or scattered?

They're relatively close. I've only been to one, a three story house that he rents the first two floors and lives on the third. But they're all probably within a few miles of each other.

perhaps i should do a cash out refinance to get cash to buy the next house instead. that way i get to keep all the tax benefits of a primary residence loan?

[Rigon]

or rent it out and buy another house. I have a few friends who started doing that, and have since quit their jobs and do that as their sole source of income.

how did they do during the recession?

they cant hire someone or their relatives to do the property management? doesnt seem like a full time job all the time .seems to be a solid source of income especially when this country is getting more and more crowded .

He did okay. I shouldn't have said it's his sole income, but it's definitely his primary income. I think he probably pulls three shifts part time at a gas station.

He started by buying one house and fixing it up. While renovating it he realized he could divide it into something for him, and a rental space. Eventually he found the second house he could do the same to, so moved out of his and rented it, moved into the beat-up house, and lived there while he renovated.

Now I think he has 10 that he rents out and an 11th that he lives in. 10 rental places keeps him pretty busy but hiring someone to manage it would kill his profit.

Are those 10 houses together in one place or one area or scattered?

They're relatively close. I've only been to one, a three story house that he rents the first two floors and lives on the third. But they're all probably within a few miles of each other.

perhaps i should do a cash out refinance to get cash to buy the next house instead. that way i get to keep all the tax benefits of a primary residence loan?

Do you itemize? Are you in a high enough bracket that the savings on your marginal rate offset the differential interest?

[sana8410]

or rent it out and buy another house. I have a few friends who started doing that, and have since quit their jobs and do that as their sole source of income.

how did they do during the recession?

they cant hire someone or their relatives to do the property management? doesnt seem like a full time job all the time .seems to be a solid source of income especially when this country is getting more and more crowded .

He did okay. I shouldn't have said it's his sole income, but it's definitely his primary income. I think he probably pulls three shifts part time at a gas station.

He started by buying one house and fixing it up. While renovating it he realized he could divide it into something for him, and a rental space. Eventually he found the second house he could do the same to, so moved out of his and rented it, moved into the beat-up house, and lived there while he renovated.

Now I think he has 10 that he rents out and an 11th that he lives in. 10 rental places keeps him pretty busy but hiring someone to manage it would kill his profit.

Are those 10 houses together in one place or one area or scattered?

They're relatively close. I've only been to one, a three story house that he rents the first two floors and lives on the third. But they're all probably within a few miles of each other.

perhaps i should do a cash out refinance to get cash to buy the next house instead. that way i get to keep all the tax benefits of a primary residence loan?

Do you itemize? Are you in a high enough bracket that the savings on your marginal rate offset the differential interest?

yup,let's go with the the hypothetical 25% married jointly bracket ...