Quote:
Originally Posted by woj
are you sure about that? "depreciation" you have to pay back... paying back interest deductions is news to me... link to source?
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Right not sure what he is talking about either. Mortgage payment interest is tax deductible if it is your primary residence and a few other situations, i've never heard of someone having to reclaim the deduction when they sell their house. Depreciation is reclaimed at sale, but not applicable since it can't be used on your primary residence, instead used for investment property. Maybe he is thinking about capital gains. If you sell your home and profit on it you *may* have to pay capital gains depending on the situation.
Quote:
Originally Posted by FreeHugeMovies
Yes, I agree. You are correct, I'm trying to understand myself. Like I said I've read this before and have been told this by many people/instructors. It's the same principle as the make a payment every two weeks. You are only adding one additional payment a year which reduces the principle.
Anyway, the answer the org question should be.
If you can make more money at a higher rate than your mortgage rate, then don't pay down your note.
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Ok, thanks for admitting you don't know what the hell you are talking about. There is benefits to doing bi-weekly payments, which is probably what you are thinking. I don't know much about it other than most mortgage companies don't allow it so that is why I haven't looked into it much. From what little I do remember it is more about the timing of the payment that affects how the interest is compounded or something like that. Again before you even take the time to figure it out first ask if your mortgage company will allow it.
But it is not just making an extra payment a year. Use the calculator and see for yourself, what you see is what you get by paying more principle each month, ie extra payment a year.