Home › Forums › Financial Markets/Economics › Payoff Mortgage in 1/3 the time without doing anything different?
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anxvariety.
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November 9, 2007 at 5:08 AM #97682November 9, 2007 at 5:08 AM #97689
CoronitaParticipantOne question.. don't have much time to answer before turning into pumpkin. Are your retirement accounts (401K, profit share, etc) fully funded?
ucodegen,
To answer #1,#2,#3, yes I'm aware of that they aren't keeping up with mortgage costs, opportunity cost investing elseware with better yield, although I need some safety cushion at least partly, and I'm fully aware of the dollar-peso issue.
….Just trying to figure out out to further reduce my mortgage costs and/or reduce my taxes. Being wage slaves doesn't really help the later. And currently, i(we) are hitting some itemized deduction phase out limits + we ALWAYS get hit with AMT, so not all the mortgage interest and property tax we pay on the mortgage is being fully utilized in the itemized deduction. Notably, while Property Tax is deductible under normal tax calculations, it is not part of AMT tax calculations. So we're losing roughly $12k in deductions under AMT tax calculations. Ironically, using a tax product, I played with some numbers. If I paid more interest expenses in my primary mortgage, I wouldn't hit AMT and my effective tax rate would drop even lower, even with the itemized deduction phase out. (the deduction would be reduced, but not completely phased out).
Yes, both my wife and I max out the 401k, and ESPP at both respective companies, and there is no other pension plan to contribute. With the recent volatility in the market, the remaining income currently is distributed roughly: $1000/month into a basket of domestic+international index and some specialty funds, $500/month into a 529 plan for a kid, and about $3000/month into a short term reserve. The rest goes into a mortgage+slightly extra principle payments roughly $4000/month ($3600 is roughly the fixed payment, with about add additional $400/month principle on top of that), $1100/month for proptax+hoa+insurance+mellrouse, $1500/month for child daycare expenses, and roughly $500/month in misc expenses. No other outstanding loans exist, though everything possible that can be charged to credit cards without a processing fee is charged to cards that have some rebate program, and each card has 0 balance end of each month.
This doesn't account for any bonus we get, which usually is used only for vacation and additional drips into index/fund basket + short term reserves. Also, December expenses are are higher than average, for obvious reasons. So gifts and charitable contributions usually comes out of the bonus pile, if any. Bonuses have fluctuated in the past, stabilizing recently .Nevertheless, neither of us count on it. We figure no bonus ==> no vacation requiring travel, limited gift giving, and limited charitable contributions.
November 9, 2007 at 6:42 AM #97626Raybyrnes
Participantfat_lazy_union
Tax wise you might want to see if your company offers a dependant care account which can reduce your taxable income. I believe the limit is 5K. If you and your wife are both working find see if one of you is over the SSI (around 97K) limit as it is that person who will see less value from the reduction.
The other area to look at is the Flex spending accounts. I have found these 2 things helpful with respect to lowering my taxes.
Last but not least consider getting your real estate licenses, insurance licenses, or any other license that allows you the ability to set up the shell for a small business. Or find a small business that you could run as a passive manager. This then provides you with a host of other tax deducitons.
November 9, 2007 at 6:42 AM #97687Participantfat_lazy_union
Tax wise you might want to see if your company offers a dependant care account which can reduce your taxable income. I believe the limit is 5K. If you and your wife are both working find see if one of you is over the SSI (around 97K) limit as it is that person who will see less value from the reduction.
The other area to look at is the Flex spending accounts. I have found these 2 things helpful with respect to lowering my taxes.
Last but not least consider getting your real estate licenses, insurance licenses, or any other license that allows you the ability to set up the shell for a small business. Or find a small business that you could run as a passive manager. This then provides you with a host of other tax deducitons.
November 9, 2007 at 6:42 AM #97698Participantfat_lazy_union
Tax wise you might want to see if your company offers a dependant care account which can reduce your taxable income. I believe the limit is 5K. If you and your wife are both working find see if one of you is over the SSI (around 97K) limit as it is that person who will see less value from the reduction.
The other area to look at is the Flex spending accounts. I have found these 2 things helpful with respect to lowering my taxes.
Last but not least consider getting your real estate licenses, insurance licenses, or any other license that allows you the ability to set up the shell for a small business. Or find a small business that you could run as a passive manager. This then provides you with a host of other tax deducitons.
November 9, 2007 at 6:42 AM #97705Participantfat_lazy_union
Tax wise you might want to see if your company offers a dependant care account which can reduce your taxable income. I believe the limit is 5K. If you and your wife are both working find see if one of you is over the SSI (around 97K) limit as it is that person who will see less value from the reduction.
The other area to look at is the Flex spending accounts. I have found these 2 things helpful with respect to lowering my taxes.
Last but not least consider getting your real estate licenses, insurance licenses, or any other license that allows you the ability to set up the shell for a small business. Or find a small business that you could run as a passive manager. This then provides you with a host of other tax deducitons.
February 23, 2009 at 9:39 AM #352564Anonymous
Guest@Ucodegen
I understand what you are saying about the cost of a HELOC but I still can’t give up on the basic idea that the money sitting in my checking each month could be used to reduce the average daily balance of my mortgage. My wife and I are both paid monthly so our checking account balance is always around 10k at the begining of each month and then back down to 1k or 2k by then end of the month. HELOC or not, is there a way to “park” that 10k in my mortgage loan just for the days I am not using it? And, if so, would it make a significant impact on the payoff time for my loan?Update:
As of today the Home Ownership Accelerator program at CMG Financial is listed as “(not currently available)” and the Macquarie Mortgages webpage no longer has a link to a USA division within their residential mortgage page. So much for that ringing endorsement!February 23, 2009 at 9:39 AM #352876Guest@Ucodegen
I understand what you are saying about the cost of a HELOC but I still can’t give up on the basic idea that the money sitting in my checking each month could be used to reduce the average daily balance of my mortgage. My wife and I are both paid monthly so our checking account balance is always around 10k at the begining of each month and then back down to 1k or 2k by then end of the month. HELOC or not, is there a way to “park” that 10k in my mortgage loan just for the days I am not using it? And, if so, would it make a significant impact on the payoff time for my loan?Update:
As of today the Home Ownership Accelerator program at CMG Financial is listed as “(not currently available)” and the Macquarie Mortgages webpage no longer has a link to a USA division within their residential mortgage page. So much for that ringing endorsement!February 23, 2009 at 9:39 AM #353007Guest@Ucodegen
I understand what you are saying about the cost of a HELOC but I still can’t give up on the basic idea that the money sitting in my checking each month could be used to reduce the average daily balance of my mortgage. My wife and I are both paid monthly so our checking account balance is always around 10k at the begining of each month and then back down to 1k or 2k by then end of the month. HELOC or not, is there a way to “park” that 10k in my mortgage loan just for the days I am not using it? And, if so, would it make a significant impact on the payoff time for my loan?Update:
As of today the Home Ownership Accelerator program at CMG Financial is listed as “(not currently available)” and the Macquarie Mortgages webpage no longer has a link to a USA division within their residential mortgage page. So much for that ringing endorsement!February 23, 2009 at 9:39 AM #353038Guest@Ucodegen
I understand what you are saying about the cost of a HELOC but I still can’t give up on the basic idea that the money sitting in my checking each month could be used to reduce the average daily balance of my mortgage. My wife and I are both paid monthly so our checking account balance is always around 10k at the begining of each month and then back down to 1k or 2k by then end of the month. HELOC or not, is there a way to “park” that 10k in my mortgage loan just for the days I am not using it? And, if so, would it make a significant impact on the payoff time for my loan?Update:
As of today the Home Ownership Accelerator program at CMG Financial is listed as “(not currently available)” and the Macquarie Mortgages webpage no longer has a link to a USA division within their residential mortgage page. So much for that ringing endorsement!February 23, 2009 at 9:39 AM #353139Guest@Ucodegen
I understand what you are saying about the cost of a HELOC but I still can’t give up on the basic idea that the money sitting in my checking each month could be used to reduce the average daily balance of my mortgage. My wife and I are both paid monthly so our checking account balance is always around 10k at the begining of each month and then back down to 1k or 2k by then end of the month. HELOC or not, is there a way to “park” that 10k in my mortgage loan just for the days I am not using it? And, if so, would it make a significant impact on the payoff time for my loan?Update:
As of today the Home Ownership Accelerator program at CMG Financial is listed as “(not currently available)” and the Macquarie Mortgages webpage no longer has a link to a USA division within their residential mortgage page. So much for that ringing endorsement!February 23, 2009 at 11:12 AM #352614anxvariety
ParticipantI just shook the Magic 8 Ball.. even it said “BS”.
February 23, 2009 at 11:12 AM #352926ParticipantI just shook the Magic 8 Ball.. even it said “BS”.
February 23, 2009 at 11:12 AM #353057ParticipantI just shook the Magic 8 Ball.. even it said “BS”.
February 23, 2009 at 11:12 AM #353088ParticipantI just shook the Magic 8 Ball.. even it said “BS”.
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