In a hurry to pay off your home loan?Written by Syd Johnson
It is possible that after a few years you might get sick of making monthly payments on your home. Then it occurs to you, why not put all your extra cash into paying off home loan. It certainly sounds like a great idea. After all, no one wants to be in debt forever. If you are average homeowner maybe you should give that idea a second thought.
Unlike other types of debt like credit cards and car loans, interest on your home loan is tax deductible. So when you look at your mortgage payments, talk to your tax advisor to see what kind of adjustments will be made once you do you tax returns. If you have car loans, student loans and any other type of personal debt, try to pay those down first and then take cash and put it towards your mortgage.
Take a look at your overall financial picture. If you have any other type of high interest debt, use extra cash to pay off outstanding balances on those items before you start putting money towards your mortgage balance. Then you want to look at your investment portfolio. Find out rate of return on your mortgage if you prepay, since itís basically paying yourself. Then compare it against return that you get from other investments and this will give a bit more to go on before you decided to funnel extra cash towards mortgage.
Are you ready for home ownership?Written by Syd Johnson
Home ownership has many advantages over renting. You get a tax break for your mortgage interest payments, you can customize your property and you are building up home equity instead of throwing away your monthly payments. Another great benefit of home ownership is sense of pride and commitment to your community. You are no longer traveling, looking or searching, but youíre putting down roots and building your life in a new way.
Tax breaks for mortgage payments A huge plus for homeowners is that they can deduct annual mortgage interest payments on their tax returns. This puts more cash back in your pocket that you can spend on yourself and on your family. You can maximize this return by making large monthly payments on a small down payment. The majority of your payments for first couple of years will be interest payments. You can use any online mortgage calculator to check numbers and see tax benefits that you can get with a mortgage instead of paying rent.
Control your space Another big advantage of home ownership is ability to customize and personalize your living space. You can paint, tear down and rebuild according to your taste. There is no need to get approval of your landlord or a rental company before you add perfect splash of color your living room. Generally you will also have much more space in your home than in an apartment. So you control how much closet space you can afford up front, and you can make minor renovations later on to give yourself a better backyard, more closet space or a larger kitchen. Itís all up to you with no one leading way.