Information on refinance home equity loan refinance interest rate refinance

An Overrated Tax Strategy: The Home Mortgage Interest Deduction

The mortgage interest deduction just might be the most overrated tax saving strategy there is, and yet it is considered by many to be a primary reason for home ownership.

Look, I present financial seminars for thousands of people every year. During breaks people will invariably come up to me and ask me questions about their personal financial situation. I tell them to do five basic things

1. Get out of debt and stay out of debt.

2. Save 3-6 months of expenses for emergencies and emergencies only.

3. Use the envelope budgeting system. It's the best budgeting system ever developed.

4. Open a Roth IRA so that you can have tax-free investments and tax-free income for the rest of your life.

5. Pay off your mortgage so that you can own a home free and clear.

The one that always meets with the most resistance is the one about paying off a mortgage. People will often say, "I don't want to pay off my mortgage because I need the tax deduction."

That kind of logic gives me a headache. Here's the deal: If you pay $1,000 a month in interest on your mortgage, and if you're in the 28% tax bracket, you will still pay $720 a month in interest ($1,000 minus 28%). So it's only a good deal compared to not getting any tax deduction at all or -- in many cases -- paying rent. A mortgage interest deduction does not "save" you money over not paying any interest at all.

In my entire career I've never heard anyone who owned a home free and clear say, "Gosh, I sure miss having that mortgage payment." So once you've found a home that you want to live in for the rest of your life, work toward paying off your mortgage early. You'll be glad you did.

(c) Larry Holmes

Larry Holmes invites you to visit http://www.smart-money-report.com/ Your common sense guide for financial and investment success.

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More Useful Resource and Updates on refinance home equity loan refinance interest rate refinance

• Monday, October 20, 2008 (Deccan Herald)
  After shoring up the banking system with Rs 145,000 crore funds, the Reserve Bank on Monday paved the way for cheaper home, consumer, corporate and personal loan rates by slashing its key short-term lending rate (repo) by 100 basis points.



• Wealth Special: Will a CRR cut reduce loan rates? (IBN live)
  As RBI cuts CRR, Wealth tell you how this move your home loan interest rate.



• National Australia Reduces Variable Home Loan Interest Rates (Bloomberg)
  Oct. 19 (Bloomberg) -- National Australia Bank Ltd., the nation's biggest by assets, cut the price of its variable interest rate mortgages, saying its cost of credit is declining.



• Consumer Loan Ratings (The Springfield News-Leader)
  Springfield financial institutions quoted the following rates Friday for home equity, auto and boat loans. The home equity rate is based on a $10,000 loan or line of credit with applicable points included. Rates are variable unless otherwise noted. Additional fees are not included. The auto loan rate is based on a 48-month contract for a new car. The boat rate is based on a loan for a new boat.



• CBA joins rate cut rush (Adelaide Now)
  THE Commonwealth Bank of Australia has cut its home loan rates, the third major bank to make a cut independent of the Reserve Bank.



• RBI cuts repo by one pc; loans to get cheaper (Chennai Online)
  Mumbai, Oct 20 After shoring up the banking system with Rs 145,000 crore funds, the Reserve Bank today paved the way for cheaper home, consumer, corporate and personal loan rates by slashing its key short-term lending rate (repo) by 100 basis points.



• ANZ cuts variable home loan rate (Sky News Australia)
  ANZ Banking Group Ltd has moved to lower its variable home loan interest rate by 25 basis points, saying the cost of wholesale funding was easing.



• Commonwealth Bank cuts home loan rates (Australian Broadcasting Corporation)
  The Commonwealth Bank has joined its rivals in cutting its main mortgage rate.



• CBA cuts variable, fixed home loan rates (News Interactive)
  THE Commonwealth Bank has dropped interest rates after its rivals led the way over the weekend.

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