I've never researched the definition of "mortgage" but I've been told it literally translates into "death grip." Even if that's not what it translates into, it's true.
There are financial planners who can make a case not to pay off the mortgage because it is ‘cheap money’; personally I don’t agree with them.
Also the property tax...tends to go up each year.
We owe a small amount on our house..
It cost $135,000.
It’s worth quit a bit more than that now.
We property manage two houses on our street, the monthly rent on the two bedroom is $1,950 per month...
“Death grip?” Sheese!
Its a little more complex than this, and it really depends on where you live, what current rents are going for. In my area it is $500-600 dollars cheaper to pay a mortgage. I do agree one should never buy a home because of the tax deduction feature.
True. But here near Salt Lake City my mortgage payment, taxes, upkeep etc added together are less than what it would cost to rent a comparable place.
It took us some time but we finally figured out how stupid the whole concept of paying a mortgage to get the tax deduction is.
We did get a mortgage but it was a 15 year one, at absurdly cheap interest rates, and what we needed to do to get our 32 acres and a house in central KY. And it cost less than a quarter what a 3 bedroom rambler in any major metropolitan city’s suburbs would cost.
And the annual property taxes are less than a single month’s car payment on a Toyota.
We will either die there or stay there until we go to assisted living. All the kids and grandkids are staking claims. :)
It means "Death Pledge" not death grip. The term actually meant how the pledge expired, and had nothing to do with actual death.
The pledge would expire (i.e. the deal dies) when the note was either paid, or went unpaid.
You have to live somewhere. If you don't buy a place then you rent. With a 30 year fixed mortgage you are locking in the monthly expense. Rent tends to increase with inflation. What tends to happen is the before long rent raises far above your old mortgage. I couldn't rent an apartment for what I pay on my mortgage now.
"I've never researched the definition of "mortgage" but I've been told it literally translates into "death grip." Even if that's not what it translates into, it's true."
A mortgage is just a low interest loan. There's nothing sinister about it.
“It took us some time but we finally figured out how stupid the whole concept of paying a mortgage to get the tax deduction is.”
I don’t know what math you used, but it wasn’t correct if that is your conclusion. Even when renting, someone had to pay the taxes and mortgage and you pay beyond that.
Had a finance professor tell the class: Say your tax rate is 15% ... you just spent $100 in interest to save $15 in taxes. How smart is that?
“how stupid the whole concept of paying a mortgage to get the tax deduction is.”
Definitely. If you must have a mortgage, that’s one thing. Bur if you can purchase outright, why wouldn’t you?