How to afford a mortgage as interest rates and home prices rise – CNBC
How to afford a mortgage as interest rates and home prices rise CNBC
How to afford a mortgage as interest rates and home prices rise CNBC
Demand for build-for-rent homes is growing as the purchase market falters. But success in the space is all about location, location, location.
The housing market saw inventory fall 4% last week and is on the cusp of breaking under 1 million total active listings.
With inflation continuing to affect interest rates, homeowners looking for financial relief may turn to their mortgages to help their overall budget. Adjustable-rate mortgages can bring interest rates down to affordable levels for borrowers, making homeownership possible during financially challenging ⦠Continue reading â
The post Pros and Cons of Adjustable-Rate Mortgages appeared first on SmartAsset Blog.
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No matter how much you make or have tucked away, you probably share this fear.
My friend Amy recently wrote with an interesting dilemma. “Should I pay off my mortgage early?” she wonders.
Amy has a high-paying job and has managed to save enough that she could be completely debt-free if she wanted to. And she kind of wants to! But is this the best choice? She’s aware that this is a nice problem to have â but it’s still a bit of a muddle. She’d like some guidance.
Here’s an abridged version of her email:
I’m wondering if you have any advice for me related to paying off a mortgage vs. keeping it for tax purposes.
Hereâs the basic rundown: I have 22 years and $103,000 left on a 30-year fixed-rate mortgage at 3.95%. My monthly payment is $668 per month. I will pay about $48000 in interest this year. I pay both my taxes and insurance out of pocket annually.
The past two years, I’ve made close to a quarter of a million dollars each year, and this year I will likely exceed that amount. This is a wonderful place to be. With no other debt, I’m contemplating whether I should completely pay off my mortgage in one swoop come November when I get my bonus.
I have advice coming from both sides. My accountant warns me against it, as I would have no other write-offs to offset my high income. However the freedom of being DEBT FREE sounds amazing, even if it comes with a high tax bill.
I would love your advice (or the advice of your readers, if this offers an opportunity to share with them).
My stock answer to this question — which I get a lot — has always been: This is a no-lose situation. Deciding whether you should pay off your house is a case where either option is awesome.
Mathematically (and financially), the best choice is almost always to carry the mortgage. However, many people receive a huge psychological boost from not having a mortgage. In other words, this is one of those situations where the smart financial decision and the smart psychological decision aren’t necessarily the same.
Although Amy is asking specifically about the tax implications, let’s start by examining the Big Picture.
Just so everyone is on the same page, here’s a quick look at the pros and cons to paying off your mortgage. There are advantages and disadvantages to both choices. Are certain advantages more important than others? You make the call.
Here’s how you can better position yourself financially this year â even in the face of recession.
There are several metrics you can use to evaluate whether a rental property investment has potential, including the 2% rule. When used with the propertyâs capitalization rate this rule helps investors get a sense of what a propertyâs rental income ⦠Continue reading â
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