Is it to sell investments pay 0 cash a home or is it to a mortgage?

Would tax benefits of mortgage outweigh income dividends? Providing I good credit capital gains tax is an issue sale of investments. So basically is it to a fully paid home or to money in stock market?

Responses:

I think you want to have a mortgage so you do not have a bunch of cash tied up in a house. it doesnt make you any money until you sell it, whereas in the mean time you are losing out on the possibilites of investing
I think that the best way to decide would be to look at the Rate of Return on your investiments, will they exceed the increase in value of your home annually usually about 3 - 5% depending on the area you live in. You also have to look at regardless of credit if you have a mortgage over 80% of the value of the home you will have to have Personal Mortgage Insurance, which runs about $70 monthly per 100k. This is not tax deductible unless you until this year you have an annual income not exceeding 120k. This is not a problem most people have. Either way you seem to be in good shape
If your investments are earning more than you are paying in a mortgage interest rate than its always better to get a mortgage. For instance if your mortgage interest rate is 5%, and your investments are getting you 10% than obviously you are going to make more money with you investment than with the house. Another factor is to look at what your LONG term rate of of house value could go up. The nation average over the past 20 years is 7%, subtract out your 5% mortage and you get a return of investment of 2% whatever your cash is earning invested, 10%. Total return of 12% opposed to just the 7% if you paid in cash. Keep in mind, you can not just sell you house immediately if something comes up and you need money like you can with stocks or mutual funds
Get a mortgage. a hundred percent financing or put down no more than 20%. Their are plenty of lenders that will not require you to pay PMI for a hundred percent loans
The tax question first - you get a $10, 000 standard deduction married joint or $5, 000 single. If you have enough deductions without mortgage interest and RE taxes to itemize then you get full advantage of paying these. ume a 40% federal and state tax rate - then a 6% mortgage costs you only 3. 6%. Pretty cheap money. If you cannot itemize then you only get part of the tax advantage of the interest RE tax payments making your cost somewhat higher. Next as an investor you should know about leverage. Let's say you buy a $100, 000 house with 20% $20, 000 down. Next let's say the house only appreciates 2% next year or $2, 000. That gives you 10% on your $20, 000 investment. Next year say with principle payments you have $21, 000 invested and it appreciates another 2% $2040 it gives you a 9. 7% return on your $21, 000 investment. The third year say you get a 5% increase in the home's value and thru principle payments you have $22, 200 invested. Your return $5, 200 is over 23% on your investment. Your average return over 3 years is over 14% a year. A pretty darn good return because of the 5 to 1 leaverage by mortgaging. I do not know what you earn on your money, but it would seem to me you would want the leverage of a mortgage and let your investments ride. If things change you can always cash your investments in and pay off the mortgage, because mortgaging gives you high returns in even a morderately rising market. JMHO

Tags: change, capital, cash, credit, live

Follow this dicussion..

Related Images:

Knowledge Base

Does Anyone know how to really get a hundred percent financing for real estate?

i have seen so many people online selling information about obtaining a hundred percent financing for real estate transactions but all of the ones that i have tried have not really worked. does anyone know of any a hundred percent financing strategy that really works? any information would be greatly (real estate investing)

Is organization teach me real estate investing ?

i really would like to get into real estate investing. however, i do not have a mentor. i wish i knew someone who started with nothing and now is a productive real estate investor. i see info out there about becoming a real estate agent but nothing on how to (home equity line of credit)

Can give me a loan to pay my land investment so I finally credit?

i have a 560 - 620 score, my credit is weak because i have notes that i still have not finished paying. i have a year to 14 months before i payoff my car, i owe $6, 500 or less on investment land of 20 acres in fabens, tx paying (home finance)

Related Images:

Knowledge Base: Home Investing

Why do conservatives confuse government finance with home ec?

when discussing matters of finance and macroeconomics they start talking about lessons learned in home ec. is that because while liberals were studying finance and economics conservatives were taking home ec?. ok. please tell us the book we should read that says government prosperity comes from spending more than they (home investments)

How to make extra money online and at home without investing any single cent?

nothing comes for free. join this site. just answer other users questions and get paid! you also earn points for commenting on other convos, if you have the top 3 points you get paid an extra 50, 75, or 100 dollars! weegy.com?r=6c4abd0d. try google's adsense program. but you hav to (home investing)

What numbers do I start with when using a Home Loan Equity Mortgage Calculator?

doesn't really matter which number is first. the most important numbers are your credit score, interest rate, equity, income / existing payments ratio. other numbers you will need are current market values, balances of existing loans, length of loan, and amount of loan. start here; locallender.info / consumer - banking (home finance)

How often do home property taxes get updated?

in a situation where a home is falling fast in value. i want to know if one has to wait long before the taxes reset to the new value. i have heard they reset every 3 years. is that correct? thanks. you do not have to wait. contact your county (home calculator)

Whos considered the responsible party on home property taxes? If your on the mortgage. ?

if your on the mortgage but not the deed to the home can you be held responsible for unpaid property taxes or is only the owner of the home liable. divorce situation. i own the home from my divorce. he signed the deed over to me, but the mortgage company (home investing)

Related Images:

Knowledge Base: Home Investments

Where real work at home opportunities? No investments! Real opportunities real pay. ?

this one involves owning your own e - book. instead of spending all those long and painstaking hours trying to produce 1 e - book you can make this one your own. you will also can get plenty of good ideas to make this thing really work. but you get (home investments)

Is legitimate to money home huge investments?

i am a at home mom, my kids are still pretty young their ages are 8, 5, 3. i am educated master's in clinical psychology and i plan to go back to work as a teacher as soon as the youngest goes off to school. my husband and i streched (home investments)

HELP! ISO work home WITHOUT fees, investments, membership?

it appears that everything i sign up with has "hidden fees" and payments you have to make before you can work. is there any "legit work" that i can do on - line that does not require an initial investment? i am not looking for a "home business", turn - (home investments)

Is it to sell investments pay 0 cash a home or is it to a mortgage?

would the tax benefits of the mortgage outweigh the income from the dividends? - providing that i have good credit and that capital gains tax is not an issue with the sale of the investments. so basically is it better to have a fully paid off home or to keep (home investments)

Are genuine work home opportunities no initial payment or investments?

are there really any genuine work from home opportunities with no initial payment or investments open to uk residents? share your personal experiences. probably not. i found one, but i did all the work myself. i am not under some pyramid scheme or internet sales gimmik. i am just a (home investments)