Mortgage

Advanced Mortgage Tricks

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advanced mortgage tricks

Advanced Refinance Tricks For the Financially Well Off Got plenty of money socked away for the kids’ college? Already have a retirement plan and funding it well? When someone asks about an emergency fund do you think, sure, which account would I use? Then, here is a trick for you. Mortgage interest rates are at historic lows. As I write this, it wouldn’t be hard at all to get a 3% mortgage if you have good credit and put 20%+ down. What if, you took $100,000 out of your mortgage with a refinance that lowered your interest rate enough to cover all closing costs, and then, put that $100,000 into a solid dividend paying stock? Just for example, right now, Verizon pays something like 4.85% per year at its current $52.50 stock price. If you took the $100,000 you got from your cash out refi, and invested in in Verizon stock as a long-term investment, Verzion would spend the next 10 or 20 years paying you the equivalent of 4.85% on your $100,000 stock investment. Which means you are earning more on your investment than you are paying on the extra mortgage principal. Now, you do have to pay 15% …

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House Poor Family Trades in For RV

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While this isn’t my usual fare, this recent article on CNBC struck a chord with me, and not necessarily in a good way. Not a bad way either, but… odd? This article details the troubles of a family that had a $4,200 per month mortgage on their home in California. Couple that with a paragraph about $110,000 in student loans, and you’ve got yourself a clickbait ready, shareable personal finance article. Here is the weird part. The article, as all of these articles do, leaves out a lot of the details that likely make this a one-off article that isn’t shareable, or doable by pretty much anyone. For example, there was a months-long road trip that has now lasted over a year. That’s cool. Where does son Aiden (8) go to school? There’s also the part about how it “helps” that neither parent had traditional 9 to 5 jobs. You mean, it’s absolutely essential that they don’t have 9 to 5 jobs, or at least that they can be full-time remote. Lastly, while living in an RV cut their living expenses from that $4,200 mortgage, the RV that they make this lifestyle work in was apparently gifted after the initial …

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How To Deduct Mortgage Interest on Income Taxes

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One of the biggest tax deductions most taxpayers will qualify for is the interest paid on their mortgage. Mortgage interest is tax deductible. Up to 100 percent of mortgage interest paid during the tax year can be deducted on your income taxes as long as your total mortgage balance is less than $1 million. In other words, unless you have more than $1 million in mortgage loans, you can deduct all of your mortgage interest. Is Mortgage Interest an Itemized Deduction? Mortgage interest is an itemized deduction. In fact, for the majority of taxpayers who get most of their income form a regular job at a company where you have taxes withheld from your paycheck based on your W2 form, the mortgage interest you pay determines whether or not you should itemize your taxes or file with the standard tax deduction. For business owners filing a Schedule C or those with a large amount of investment or interest income, that will not apply. How To Decide Whether to Take the Standard Deduction or Itemize The standard deduction for 2015 is $6,200 for single filers and $12,600 for married filing joint taxpayers. If the amount of mortgage interest reported on Form 1098 …

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Paying Off Your House Mortgages and Money Psychology

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By any measure, the math says that paying off your home is not a smart move financially. Then why is it that so many people see paying off their home as a great goal? There are three reasons really. One is out of date thinking, the other is a financial myopia, the last one is No Discipline Syndrome. Out of Date Out of date thinking, or as I like to call it “Old Timey Wisdom” (like in Oh Brother Where Are’t Thou – Old Timey Music). Old Timey Wisdom is wisdom that was once true in different times but may not hold up today. Just one generation ago, paying off your house meant financial security. Often, this was a major deal to this generation, because one generation before a lot of people lost their homes at various times, but most notably during the Great Depression. The wisdom became that as long as your house was paid off, you never had to worry about a huge part of your financial security. So what is different today than just a few decades ago? Well, then, it was likely that the first house you bought could be the one you lived in your …

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Ah…the Fine Print

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houseofmoneyEver read a newspaper article where someone is suing a company for misleading them? The company always says something like “we disclosed all the information to the client” as their defense. Want to see it in action? Countrywide Home Loans recently sent a client some unsolicited mail (i.e. junk mail) in which they offered a No closing cot Refi! At the top in big letters on a stand-out blue background it says:

“Pay hundreds – or even thousands at closing

or PAY ZERO with Countrywide.

You Decide.”

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