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#11
05-28-2007, 03:43 PM
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Re: Owning a house.
[ QUOTE ]
Also the "You can deduct your mortgage" is overrated. [/ QUOTE ] You pay about 60k in interest in the first 5 years on a 250k 25 yr loan at 6%. That seems like a substantial chunk to me to be able to deduct. 
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#12
05-28-2007, 03:58 PM
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Re: Owning a house.
[ QUOTE ]
[ QUOTE ] Also the "You can deduct your mortgage" is overrated. [/ QUOTE ] You pay about 60k in interest in the first 5 years on a 250k 25 yr loan at 6%. That seems like a substantial chunk to me to be able to deduct. [/ QUOTE ] It seems like a substantial amount to pay as well. So you pay $60k in interest and pay $18k less in taxes in that time... hmm, where's the deal? But it is really the other costs that really make buying a house not much a deal or a wash, or even a bad idea. You guys realize, adjusted for inflation, real estate doesn't appreciate over time, right?
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#13
05-28-2007, 04:02 PM
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Re: Owning a house.
[ QUOTE ]
[ QUOTE ] Also the "You can deduct your mortgage" is overrated. [/ QUOTE ] You pay about 60k in interest in the first 5 years on a 250k 25 yr loan at 6%. That seems like a substantial chunk to me to be able to deduct. [/ QUOTE ] Right, so 60k/5 is 12k. You already get to deduct $10,300 no matter what. Now you got to deduct $1700 by paying 12k in interest. You saved about $425 in taxes. After the first 5 years or so the interest will be less then your standard deduction and you will not be able to deduct anything. What you don't get I guess is that you and your wife already can deduct most of the mortgage advantage anyway. If you are single it has more of an advantage but it still is not as good as the mortgage industry would want you to think.
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#15
05-28-2007, 05:26 PM
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Re: Owning a house.
[ QUOTE ]
But can you deduct the first 10,300 if you don't have a mortgage to begin with? I'm unfamiliar with this since I'm not American. [/ QUOTE ] Yes.
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#17
05-28-2007, 06:24 PM
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Re: Owning a house.
[ QUOTE ]
I'm watching TLC about couples buying houses and living together. It seems to me the thought of buying a house is worthless for the fact that the bank owns it and you're going to end up paying 3x the price if you dont just pay up front. Your thoughts? [/ QUOTE ] The bank doesn't own it. Please tell me how the bank owns the house...I'm really interested to know.
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#18
05-28-2007, 07:13 PM
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Re: Owning a house.
[ QUOTE ]
[ QUOTE ] [ QUOTE ] Also the "You can deduct your mortgage" is overrated. [/ QUOTE ] You pay about 60k in interest in the first 5 years on a 250k 25 yr loan at 6%. That seems like a substantial chunk to me to be able to deduct. [/ QUOTE ] Right, so 60k/5 is 12k. You already get to deduct $10,300 no matter what. Now you got to deduct $1700 by paying 12k in interest. You saved about $425 in taxes. [/ QUOTE ] Your logic is flawed. With 12K in MI payments, you would deduct 12K + whatever other items you can. The most common flaw in overstatement of MI deduction benefit is that people miscalculate and treat all MI as free money as it is "tax deductible". In reality of course people often pay $3 to get $1 back and think they are coming out ahead. J
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#19
05-28-2007, 09:16 PM
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Re: Owning a house.
[ QUOTE ]
[ QUOTE ] I'm watching TLC about couples buying houses and living together. It seems to me the thought of buying a house is worthless for the fact that the bank owns it and you're going to end up paying 3x the price if you dont just pay up front. Your thoughts? [/ QUOTE ] The bank doesn't own it. Please tell me how the bank owns the house...I'm really interested to know. [/ QUOTE ] Who do they pay when they get their paycheck? The bank for their home, the bank for their car, and the bank for their credit cards. That's why bank stock is gogogogo.
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#20
05-28-2007, 10:04 PM
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Re: Owning a house.
I think ya'll are looking at this in too much of a short-term perspective. Of course it's stupid to buy a house if you only plan on living there for 3 years. I'm sure plenty of you know someone who lives in a very nice house right now and is paying $700 on the mortgage because they bought it a while ago. It's a solid move if you're market isn't over-inflated and you plan to stay for a while.
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