paying down your mortgage gives you a sure roi. Other investments may not. Some people consider a house an investment. They are not. They are an expensive place to live. They require maintenance and insurance and taxes. They are preferable to paying rent however. Consequently, buying a larger house than needed is a waste of money. Once the house is payed for, the money that is saved can then be invested in other investments. Hopefully, they will give you a better return than paying down you mortgage, but that has not always been the case for everyone.
2006-11-22 09:00:51
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answer #1
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answered by Anonymous
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I would spend the extra money on the mortgage. Even if the interest rate was low. Because the risk from investing and the capital gains you pay on investments are things people tend to forget when trying to decide. I would only get a bigger house if I needed a bigger house. Without payments you can go fishing for investments from solid ground. People move every 5-7 years. So, you should get that extra house money back along with any capital gains from the increased house values. Remember, as the house goes up in value, you do not pay taxes on that profit if you put it into another house up to 200k. This is assuming your house is a good investment and is going up in value. If not, I would rethink putting money in something consistently going down in value.
And, do not keep a mortgage to get the tax break for interest paid throughout the year. It's not worth it. Not if you look at the numbers. Say you are sending the mortgage company 5000k in interest every year. You report that 5000K to Uncle Sam as a deduction at the end. The next year during tax time you recieve SOME PART OF THE 5000K back. Not a good deal. I would rather have no house payment and invest that extra money.
2006-11-22 05:44:36
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answer #2
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answered by ontopofoldsmokie 6
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I've never understood paying off your mortgage early. Then, you have one less thing to use to get some of your tax money back at the end of the year. If you buy a bigger place, you'll still be paying interest on that.
You should, if you haven't already, max out your 401K. Especially if your Company contributes a percentage of what you pit in. Then, invest. Make your money work fot you. Diversify your portfolio into as many different categories as you want when you're young. Test the water so to speak. Never invest in your own place of employment. You have a big enough investment with them just by working for them. Why pay them more on top of giving your time? Put an automatic amount into a money market account each paycheck. Just let it sit if possible. The interest rate is higher and you'd be surprised how much interest you can earn on a growing bank account. The bank frowns however on more than six withdrawals per month so, use your checking for spending. Peace Brother
2006-11-22 05:35:46
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answer #3
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answered by micky 2
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Since i hate debt, i would pay more to the morgage first. But i think it all depends on the rates you can get. If you can get a return on your investment higher than your morgage interest rate (highly unlikely), then it may be wiser to invest the money. I'm not one to buy a bigger house since it would just increase my debt. But maybe that bigger house could be a better investment. In the end, i guess it'd have to be the best investment. All things being equal, i'd pay off the morgage first, then invest the money. The last thing I would do is buy a bigger house.
2006-11-22 09:42:33
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answer #4
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answered by tijas2 2
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Pay off the mortgage as fast as I can and then invest the money I would have spent monthly on the mortgage.
2006-11-22 05:21:44
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answer #5
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answered by ? 6
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Pay off mortgage!!! Then the money that would have been spent on that can be saved or invested(be careful). Do you REALLY need a larger house?
2006-11-22 05:20:05
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answer #6
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answered by TexasRose 6
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No mortgage.. already paid that off a few years ago...
Certainly do not need more house cleaning to do...
I already invest vast amounts but I would simply add to them and make even more! The more money I make the more I can do for others.
2006-11-22 07:20:33
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answer #7
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answered by Kitty 6
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Unless I had a fixed mortgage at an extremely low rate, I would get myself out of debt before attempting to make the money grow. In other circumstances you would normally have to assume too much risk to produce a return greater than the mortgage rate. Granted, there are relative terms in the foregoing: What is an "extremely low rate"? How much risk is "too much"? These are matters for you to decide. But for anyone, being debt-free provides a strong measure of financial relief.
2006-11-22 07:05:49
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answer #8
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answered by jerrold 3
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I'd prefer to pay off the mortgage if one exists. If I don't have debt, and can afford to live someplace better while still keeping a percentage of my income invested, why not, Real Estate is an investment too.
2006-11-22 05:17:58
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answer #9
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answered by SteveA8 6
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I would make additional payments on my mortgage. While my interest rate is quite low, I still couldn't make a better return by investing, unless I used it as a down payment for additional real estate, which I don't want to do right now.
2006-11-22 05:19:19
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answer #10
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answered by dig4words 3
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