[Fearful]

[quote=Nor-LA-SD-guy]

Good Advice Patb,

So do let us know when we get to the bottom will you,
Thanks.
[/quote]
If you cannot figure it out for yourself, no one can help you.

[Fearful]

[quote=Nor-LA-SD-guy]

Good Advice Patb,

So do let us know when we get to the bottom will you,
Thanks.
[/quote]
If you cannot figure it out for yourself, no one can help you.

[Fearful]

[quote=Nor-LA-SD-guy]

Good Advice Patb,

So do let us know when we get to the bottom will you,
Thanks.
[/quote]
If you cannot figure it out for yourself, no one can help you.

[Fearful]

[quote=svelte]In my situation, my sub 5% fixed mortgage is actually a 2.x% mortgage since Unk Sam lets me deduct the mortgage interest – without that deduction my fed taxes would be way higher since I couldn’t itemize.

Why in the world would I want to pay off a 2.x% loan early – I can earn about that much in a CD right now with the chance that I will earn a much better return in the next few years as interest rates march higher (yes I’m in the inflationist camp).

If it makes you sleep better at night, then go ahead and pay off that low cost mortgage. I’ve done that before and it ate me up not being able to itemize…dollars just flew out of my wallet…I’m not going down that path again.[/quote]
You are making several mistakes. Compare pre-tax to pre-tax or post-tax to post-tax, but do not mix the two. Compare the CD to the pre-tax interest rate; compare muni bond interest rates to post-tax interest rate. At 5% you are roughly breaking even.

Also, your marginal tax rate is probably around 45%, so the 5% is converted to 2.75%, not 2%.

Finally, your mortgage interest is only deductible to the extent that it, plus your property and state taxes, exceed your standard deduction.

However, you are correct in recognizing the benefits of diversifying your assets by taking on debt and offsetting it with equivalently earning investments. Better to be $100K in debt and have $100K in the bank than have zero in both. If interest rates fall further, you can pay off the debt. If interest rates rise, you can enjoy increased earnings. Just don’t lock up the money in 10-year debt – borrow long and lend short to give yourself the most flexibility.

[Fearful]

[quote=svelte]In my situation, my sub 5% fixed mortgage is actually a 2.x% mortgage since Unk Sam lets me deduct the mortgage interest – without that deduction my fed taxes would be way higher since I couldn’t itemize.

Why in the world would I want to pay off a 2.x% loan early – I can earn about that much in a CD right now with the chance that I will earn a much better return in the next few years as interest rates march higher (yes I’m in the inflationist camp).

If it makes you sleep better at night, then go ahead and pay off that low cost mortgage. I’ve done that before and it ate me up not being able to itemize…dollars just flew out of my wallet…I’m not going down that path again.[/quote]
You are making several mistakes. Compare pre-tax to pre-tax or post-tax to post-tax, but do not mix the two. Compare the CD to the pre-tax interest rate; compare muni bond interest rates to post-tax interest rate. At 5% you are roughly breaking even.

Also, your marginal tax rate is probably around 45%, so the 5% is converted to 2.75%, not 2%.

Finally, your mortgage interest is only deductible to the extent that it, plus your property and state taxes, exceed your standard deduction.

However, you are correct in recognizing the benefits of diversifying your assets by taking on debt and offsetting it with equivalently earning investments. Better to be $100K in debt and have $100K in the bank than have zero in both. If interest rates fall further, you can pay off the debt. If interest rates rise, you can enjoy increased earnings. Just don’t lock up the money in 10-year debt – borrow long and lend short to give yourself the most flexibility.

[Fearful]

[quote=svelte]In my situation, my sub 5% fixed mortgage is actually a 2.x% mortgage since Unk Sam lets me deduct the mortgage interest – without that deduction my fed taxes would be way higher since I couldn’t itemize.

Why in the world would I want to pay off a 2.x% loan early – I can earn about that much in a CD right now with the chance that I will earn a much better return in the next few years as interest rates march higher (yes I’m in the inflationist camp).

If it makes you sleep better at night, then go ahead and pay off that low cost mortgage. I’ve done that before and it ate me up not being able to itemize…dollars just flew out of my wallet…I’m not going down that path again.[/quote]
You are making several mistakes. Compare pre-tax to pre-tax or post-tax to post-tax, but do not mix the two. Compare the CD to the pre-tax interest rate; compare muni bond interest rates to post-tax interest rate. At 5% you are roughly breaking even.

Also, your marginal tax rate is probably around 45%, so the 5% is converted to 2.75%, not 2%.

Finally, your mortgage interest is only deductible to the extent that it, plus your property and state taxes, exceed your standard deduction.

However, you are correct in recognizing the benefits of diversifying your assets by taking on debt and offsetting it with equivalently earning investments. Better to be $100K in debt and have $100K in the bank than have zero in both. If interest rates fall further, you can pay off the debt. If interest rates rise, you can enjoy increased earnings. Just don’t lock up the money in 10-year debt – borrow long and lend short to give yourself the most flexibility.

[Fearful]

[quote=svelte]In my situation, my sub 5% fixed mortgage is actually a 2.x% mortgage since Unk Sam lets me deduct the mortgage interest – without that deduction my fed taxes would be way higher since I couldn’t itemize.

Why in the world would I want to pay off a 2.x% loan early – I can earn about that much in a CD right now with the chance that I will earn a much better return in the next few years as interest rates march higher (yes I’m in the inflationist camp).

If it makes you sleep better at night, then go ahead and pay off that low cost mortgage. I’ve done that before and it ate me up not being able to itemize…dollars just flew out of my wallet…I’m not going down that path again.[/quote]
You are making several mistakes. Compare pre-tax to pre-tax or post-tax to post-tax, but do not mix the two. Compare the CD to the pre-tax interest rate; compare muni bond interest rates to post-tax interest rate. At 5% you are roughly breaking even.

Also, your marginal tax rate is probably around 45%, so the 5% is converted to 2.75%, not 2%.

Finally, your mortgage interest is only deductible to the extent that it, plus your property and state taxes, exceed your standard deduction.

However, you are correct in recognizing the benefits of diversifying your assets by taking on debt and offsetting it with equivalently earning investments. Better to be $100K in debt and have $100K in the bank than have zero in both. If interest rates fall further, you can pay off the debt. If interest rates rise, you can enjoy increased earnings. Just don’t lock up the money in 10-year debt – borrow long and lend short to give yourself the most flexibility.

[Fearful]

[quote=svelte]In my situation, my sub 5% fixed mortgage is actually a 2.x% mortgage since Unk Sam lets me deduct the mortgage interest – without that deduction my fed taxes would be way higher since I couldn’t itemize.

Why in the world would I want to pay off a 2.x% loan early – I can earn about that much in a CD right now with the chance that I will earn a much better return in the next few years as interest rates march higher (yes I’m in the inflationist camp).

If it makes you sleep better at night, then go ahead and pay off that low cost mortgage. I’ve done that before and it ate me up not being able to itemize…dollars just flew out of my wallet…I’m not going down that path again.[/quote]
You are making several mistakes. Compare pre-tax to pre-tax or post-tax to post-tax, but do not mix the two. Compare the CD to the pre-tax interest rate; compare muni bond interest rates to post-tax interest rate. At 5% you are roughly breaking even.

Also, your marginal tax rate is probably around 45%, so the 5% is converted to 2.75%, not 2%.

Finally, your mortgage interest is only deductible to the extent that it, plus your property and state taxes, exceed your standard deduction.

However, you are correct in recognizing the benefits of diversifying your assets by taking on debt and offsetting it with equivalently earning investments. Better to be $100K in debt and have $100K in the bank than have zero in both. If interest rates fall further, you can pay off the debt. If interest rates rise, you can enjoy increased earnings. Just don’t lock up the money in 10-year debt – borrow long and lend short to give yourself the most flexibility.

[Fearful]

[quote=eyePod] He came back with basically “Now is a great time to buy” [/quote]
Now is a great time to accept a lower commission rate.

[Fearful]

[quote=eyePod] He came back with basically “Now is a great time to buy” [/quote]
Now is a great time to accept a lower commission rate.

[Fearful]

[quote=eyePod] He came back with basically “Now is a great time to buy” [/quote]
Now is a great time to accept a lower commission rate.

[Fearful]

[quote=eyePod] He came back with basically “Now is a great time to buy” [/quote]
Now is a great time to accept a lower commission rate.

[Fearful]

[quote=eyePod] He came back with basically “Now is a great time to buy” [/quote]
Now is a great time to accept a lower commission rate.

[Fearful]

[quote=sdrealtor]I didnt say an agents job starts when the offer is received, I said a “GOOD” agents job start then. Any tool in the shed can list a property and get an offer (just keep lowering the price), a good agent will help guide you through wether it is a good offer, whether it is a viable buyer, will keep that buyer in line, will keep the transaction moving forward, knows when to push and when to give in and can solve problems. A failed escrow can cost you alot of money in this market as the best offers tend to come first and we are in a downward trejectory. A good agent will get rid of a buyer that will not perform sooner than later.

sdr[/quote]
Agreed wholeheartedly. The agent’s true value comes out in the negotiation process. Up to that point it is generic stuff that any agent worth anything will know how to handle.

[Fearful]

[quote=sdrealtor]I didnt say an agents job starts when the offer is received, I said a “GOOD” agents job start then. Any tool in the shed can list a property and get an offer (just keep lowering the price), a good agent will help guide you through wether it is a good offer, whether it is a viable buyer, will keep that buyer in line, will keep the transaction moving forward, knows when to push and when to give in and can solve problems. A failed escrow can cost you alot of money in this market as the best offers tend to come first and we are in a downward trejectory. A good agent will get rid of a buyer that will not perform sooner than later.

sdr[/quote]
Agreed wholeheartedly. The agent’s true value comes out in the negotiation process. Up to that point it is generic stuff that any agent worth anything will know how to handle.

[Author]

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