Re: BBV in MTT - Closed On a House Today (Totally Not Even Close to OT
 

congrads man, sounds sick.

Re: BBV in MTT - Closed On a House Today (Totally Not Even Close to OT
 

i like the piece of mind of paying cash (that is what I did when I moved from Los Angeles to North Carolina. I love not having a mortgage payment. I also payed down my car loan early despite having a 0% loan.

Something about having no payments every month rules.

Im sure their are lots of financial reasons not to do this, but...

Re: BBV in MTT - Closed On a House Today (Totally Not Even Close to OT
 

serious...talk to an accountant...

you want to leverage appreciating assets, especially with tax breaks included....

I could pay off my house tomorrow but know that is making me money...

Re: BBV in MTT - Closed On a House Today (Totally Not Even Close to OT
 

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Paying cash for a house is not very smart...1st of all all the interest is tax deductable (talking in the US obv..no idea for Canada)...since you will obv be paying some taxes the interest is "free" money...you can earn 10% on your money in the market fairly easy. So assume 10% return and 6% interest rate on loan and you are throwing away $80,000 per year on a $500,000 house....

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Your math confuses me. I see $20k on the 4% float. As for the tax break, that's not free money its money that's somewhere in the 65 cents on the dollar range. Effectively, if I'm doing the math right, the tax break, assuming you're in the highest tax bracket, effectively reduces a 6% interest rate to 3.9%. Call it 4% for short.

So maybe you can count the value as of being able to invest the money as 30k on a $500,000 loan. But I'm no math expert so maybe I'm wrong on that.

Also, 10% is a nice return, a lot of people manage not to invest that well. (I mean, index funds are so fricken boring...)

Now say the house is $180k not $500k. Now you're talking about a little over 10k a year. Still not nothing, but maybe not worth it for somebody who'd rather have piece of mind of an asset free and clear -- and in any case, not anything like $80k a year.

--Zetack

Re: BBV in MTT - Closed On a House Today (Totally Not Even Close to OT
 

Congrats on breaking your cherry! Salud, Mr. Rollo!

Re: BBV in MTT - Closed On a House Today (Totally Not Even Close to OT
 

Also, reason I bought in cash in lieu of financing is because house was a foreclosure and well below market value, offering cash was a huge advantage for me entering a multiple bid transaction.

Re: BBV in MTT - Closed On a House Today (Totally Not Even Close to OT
 

I can agree with that as I buy foreclosed properties as rentals....

I would AFTER renovation have it appraised and get a loan for 80% of its value...especially at todays rates...its free money.

Re: BBV in MTT - Closed On a House Today (Totally Not Even Close to OT
 

[ QUOTE ]
I can agree with that as I buy foreclosed properties as rentals....

I would AFTER renovation have it appraised and get a loan for 80% of its value...especially at todays rates...its free money.

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What I will probably do is after it is done, take a line of equity out on its newly appraised value and start to look for property #2.