zubs said:
qwerty said:
Compressed-Village said:
I hate starting over again. I, would love to be debt free of housing payment, but the funny thing is as soon as we pay off the house, we then worry about having nothing to write off.
Why would you want to pay a $1 of interest to save 25-35 cents? Wouldn't you rather pay 25-35 cents in taxes and save the rest?
Is there any scenario where getting a huge mortgage for the tax shelter would be financially smart?
The tax benefit of a mortgage should be seen as a cherry on top. You should not get a mortgage for the purpose of saving on taxes for the aforementioned reasons.
For the same house, if you were renting it for 3,000 per month but you could buy it with PITI of 3,300 before tax savings, let's say the interest was 1500 and your combined (fed and state) marginal tax rate of 40%, your tax benefit would be 600. So your PITI after tax becomes 2700 vs renting for 3000. In that case you should buy the house because the tax benefits make it cheaper to own than rent.