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Jonathan Clements: Nine Reasons To Love Your Mortgage
Oy. Filler article, plus filler article in a time period where cash buyers are at the highest % in ages (if not ever.)
The one thing that it doesn't mention is that the mortgage cost stays the same. Apartment rental costs have skyrocketed in the last 10 years with more people renting. Yes, property taxes may go up, but if you're renting you're still having to pay that (and then some), just indirectly.
Next to the tax free compounding of capital in an IRA etc., I can't think of any better way to build wealth than to be 100% debt free (and that includes no mortgage!)
The best reason for borrowing (holding a mortgage) vs other forms of borrowing are the tax benefits. Obivously not needing to borrow is the best scenario, but the after tax benefits of a home mortgage borrowing provides is worthy of consideration.
Here's a calculator to help a mortgage borrower determine the true costs after tax deductions are taken into consideation.
All Clements's reasons apply and have applied to me in spades for the last few decades before retirement, and at such low rates in retirement I ain't paying off no mortgage or heloc now. However my tax breaks are approaching zero as my taxes in retirement are just so damn low. (Still working in brokerage accounts against cg losses dating back to 2000 bust, plus in a few years it'll be Roth withdrawals coming.) Surprised no one has written extensively about really low tax rates in retirement, or maybe they have and I've missed the articles.
>>Surprised no one has written extensively about really low tax rates in retirement, or maybe they have and I've missed the articles<<<
Smart man having a Roth. One of my dumbest moves (in hindsight of course) was not converting some or all when they became available (1997 was it) and my account was much smaller. As for low tax rates/taxes in retirement, I wish. When I have to begin my RMDs in about 3 years my taxes will rise dramatically compared to now.
@ Junkster: Quoting my late father. " I don't mind playing taxes, as long as I have the money to pay them." You should be so fortunate many times over. Derf
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Regards,
Ted
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The one thing that it doesn't mention is that the mortgage cost stays the same. Apartment rental costs have skyrocketed in the last 10 years with more people renting. Yes, property taxes may go up, but if you're renting you're still having to pay that (and then some), just indirectly.
http://market-ticker.org/akcs-www?post=229249
Here's a calculator to help a mortgage borrower determine the true costs after tax deductions are taken into consideation.
Calculators/MortgageTaxes
Smart man having a Roth. One of my dumbest moves (in hindsight of course) was not converting some or all when they became available (1997 was it) and my account was much smaller. As for low tax rates/taxes in retirement, I wish. When I have to begin my RMDs in about 3 years my taxes will rise dramatically compared to now.
Derf