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  1. #1
    Abner is offline Registered User
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    Homeowner's tax right off

    I owe $96,000.00 on my house in order to pay it off. I know that I will lose my tax deduction once I pay it off. Does anyone know what the write off rate is for being a homeowner? I hope I this makes sense.

    Thanks!
    XVI.8: Confucius said, "There are three things of which the superior man stand in awe. He stands in awe of the ordinances of Heaven. He stands in awe of great men. He stands in awe of the words of the sages. The mean man does not know the ordinances of Heaven, and consequently does not stand in awe of them. He is disrespectful to great men. He makes sport of the words of the sages."

  2. #2
    Johann is offline Registered User
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    Forgive a Canadian for getting in on this one, Abner - but isn't the "Tax writeoff" you mention related to mortgage interest? I believe you subtract from your income the amount of mortgage interest you've paid in the past year. You can easily figure what the tax saving is, depending on your bracket etc.

    When you've paid the mortgage off - no interest, so no deduction. Unless I'm missing something. This is a tax provision we Canadians envy. We don't have it, here.

    J.

  3. #3
    decimon is offline Registered User
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    Quote Originally Posted by Johann View Post
    When you've paid the mortgage off - no interest, so no deduction. Unless I'm missing something. This is a tax provision we Canadians envy. We don't have it, here.

    J.

    The tax advantage becomes part of the value of the house which becomes part of the price of the house.

  4. #4
    me again is offline Registered User
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    Quote Originally Posted by Abner View Post
    I owe $96,000.00 on my house in order to pay it off. I know that I will lose my tax deduction once I pay it off. Does anyone know what the write off rate is for being a homeowner? I hope I this makes sense.
    There are two kinds of tax write-offs:
    - mortgage deduction (like your 96k)
    - property taxes

    This writer is not sure if the mortgage calculator is accurate, but you can check it out here:
    Mortgage Interest Tax Deduction Calculator - Bankrate
    MA, Franciscan University of Steubenville, Theology: in-progress online
    Info: http://www.franciscan.edu/academics/graduate-programs/
    Favorite scriptures: Rev. 11:15 & Luke 24:45

    LET'S DO THIS! https://www.facebook.com/TrumpForPresident2020/

  5. #5
    Abner is offline Registered User
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    Quote Originally Posted by me again View Post
    There are two kinds of tax write-offs:
    - mortgage deduction (like your 96k)
    - property taxes

    This writer is not sure if the mortgage calculator is accurate, but you can check it out here:
    Mortgage Interest Tax Deduction Calculator - Bankrate
    Thanks! I appreciate it.
    XVI.8: Confucius said, "There are three things of which the superior man stand in awe. He stands in awe of the ordinances of Heaven. He stands in awe of great men. He stands in awe of the words of the sages. The mean man does not know the ordinances of Heaven, and consequently does not stand in awe of them. He is disrespectful to great men. He makes sport of the words of the sages."

  6. #6
    cookderosa is offline Resident Chef
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    I just read about this on Dave Ramsey's page- he explains the math behind making the decision. https://www.daveramsey.com/askdave/t...l-sophisticate
    Jennifer
    MS Applied Nutrition, Canisius College
    AA & BA Social Science, Thomas Edison State College
    AOS Culinary Arts, Culinary Institute of America

    The placebo effect should be kicking in any minute.

  7. #7
    Johann is offline Registered User
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    Pretty simple. From the article:

    "What these idiots are saying all over America is that you need to keep your tax deduction—and you’re an idiot if you believe that." i.e pay the mortgage off (stop paying interest) as soon as you can.

    Me-again mentioned the property tax credit. Well, at least we have that one in Canada - where I live, anyway. It's part of the Provincial tax return, here. And that credit has nothing to do with mortgage / no mortgage.

    J.
    Last edited by Johann; 09-30-2017 at 09:45 AM.

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  9. #8
    me again is offline Registered User
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    Quote Originally Posted by Johann View Post
    Pretty simple. From the article:

    "What these idiots are saying all over America is that you need to keep your tax deduction—and you’re an idiot if you believe that." i.e pay the mortgage off (stop paying interest) as soon as you can.
    If you take 30 years to pay off a standard mortgage, then you will end up paying over three times the value of the home, due to the compounding interest rate. For example, if you agree to pay 100k for a house, then at the end of 30 years, you will have paid about 300k, due to the accrued interest rates. The banker makes the most money when you don't payoff your loan. No annual tax write-offs can justify or recoup paying 300k for a 100k home. Debt free is the way to be.
    MA, Franciscan University of Steubenville, Theology: in-progress online
    Info: http://www.franciscan.edu/academics/graduate-programs/
    Favorite scriptures: Rev. 11:15 & Luke 24:45

    LET'S DO THIS! https://www.facebook.com/TrumpForPresident2020/

  10. #9
    Johann is offline Registered User
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    Debt free is the way to be.
    Yay! Took me far too long - but it's good being here!

    J.

  11. #10
    Johann is offline Registered User
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    Quote Originally Posted by me_again
    If you take 30 years to pay off a standard mortgage, then you will end up paying over three times the value of the home..
    100% true. But this will take SOME of the sting out of it, if you have to carry a mortgage:

    If you take 30 years to pay off a standard mortgage, you will end up paying over three times what your home was worth 30 years ago, when you borrowed the money. If it's now worth TEN times what you paid 30 years ago -- it doesn't feel QUITE so bad! Likely, if you hadn't signed that mortgage - there's no way you could have afforded to buy that home. Even if, years later, you saved up the entire initial value of the home, the price would probably have gone up to exceed your savings by a considerable amount. And you'd have foregone years of living in the home.

    A mortgage of some sort is a necessary evil for most - and yes, you can save a lot of money if you pay it off early. Even simple things help, like getting on weekly or bi-weekly payments. That way, you make payments above the traditional 12 a year and reduce both debt and time-to-zero quite a bit. And when mortgage-shopping, watch what provisions are available for periodic principal reduction, without penalty.

    J.
    Last edited by Johann; 09-30-2017 at 12:08 PM.

  12. #11
    Johann is offline Registered User
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    "My mama told me, "You better shop around, (shop, shop)
    Oh yeah, you better shop around." (shop, shop around)" - Smokey Robinson


    J.

  13. #12
    Johann is offline Registered User
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    And here's a cautionary tale about a man with several mortgages:

    "As of February 2017, Manafort had about $12 million in home equity loans outstanding. For one home, loans of $6.6 million exceeded the value of that home; the loans are from the Federal Savings Bank of Chicago, Illinois, whose CEO, Steve Calk, was a campaign supporter of Donald Trump and is a member of Trump's Economic Advisory Council.[77] It was subpoenaed in July 2017 by New York prosecutors about the loans they had issued to Manafort during the 2016 presidential campaign. At the time these loans represented about a quarter of the banks equity capital."

    From here: https://en.wikipedia.org/wiki/Paul_Manafort

    "Neither a borrower, nor a lender be; For loan oft loses both itself and friend." - Polonius, in Hamlet.

    J.
    Last edited by Johann; 09-30-2017 at 12:22 PM.

  14. #13
    Abner is offline Registered User
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    Quote Originally Posted by Johann View Post
    100% true. But this will take SOME of the sting out of it, if you have to carry a mortgage:

    If you take 30 years to pay off a standard mortgage, you will end up paying over three times what your home was worth 30 years ago, when you borrowed the money. If it's now worth TEN times what you paid 30 years ago -- it doesn't feel QUITE so bad! Likely, if you hadn't signed that mortgage - there's no way you could have afforded to buy that home. Even if, years later, you saved up the entire initial value of the home, the price would probably have gone up to exceed your savings by a considerable amount. And you'd have foregone years of living in the home.

    A mortgage of some sort is a necessary evil for most - and yes, you can save a lot of money if you pay it off early. Even simple things help, like getting on weekly or bi-weekly payments. That way, you make payments above the traditional 12 a year and reduce both debt and time-to-zero quite a bit. And when mortgage-shopping, watch what provisions are available for periodic principal reduction, without penalty.

    J.
    I refinanced to a 15 year loan several years ago. The rate of interest is very low. I paid $165,000.00 over twenty years ago when the real estate market tanked. Houses like mine are selling are for approximately $625,000.00 right now. I couldn't afford to buy my house at today's prices.
    Last edited by Abner; 09-30-2017 at 12:48 PM.
    XVI.8: Confucius said, "There are three things of which the superior man stand in awe. He stands in awe of the ordinances of Heaven. He stands in awe of great men. He stands in awe of the words of the sages. The mean man does not know the ordinances of Heaven, and consequently does not stand in awe of them. He is disrespectful to great men. He makes sport of the words of the sages."

  15. #14
    Johann is offline Registered User
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    Quote Originally Posted by Abner
    I couldn't afford to buy my house at today's prices.
    Well, thank goodness for the "necessary evil" of a mortgage, then. Now, you don't have to...

    J.

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  17. #15
    Abner is offline Registered User
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    Quote Originally Posted by Johann View Post
    Well, thank goodness for the "necessary evil" of a mortgage, then. Now, you don't have to...

    J.
    Yeah, my mortgage is less than what it would have cost me to rent. I live in the OC (Orange County, CA) and the home prices and rent prices are very high. Lord willing, I will have my house paid in 9 years. I will be the ripe age of 60, which is still relatively young by today's standards. Time seems to be speeding up the older that I get!
    XVI.8: Confucius said, "There are three things of which the superior man stand in awe. He stands in awe of the ordinances of Heaven. He stands in awe of great men. He stands in awe of the words of the sages. The mean man does not know the ordinances of Heaven, and consequently does not stand in awe of them. He is disrespectful to great men. He makes sport of the words of the sages."

  18. #16
    John Bear is offline Senior Member
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    Let us not forget that when you sell the house and move to Humptulips* you pay no capital gains taxes on the first $500,000 of profits: a personal gift to you from Newt Gingrich.

    ________
    *I actually saw Humptulips mentioned in a news story the other day. https://en.wikipedia.org/wiki/Humptulips,_Washington

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