[garysears]

That 14% sounds like a lot, but is it really your total cost advantage? Are you assuming the taxes saved are applied to the loan principal?

You only see the full advantage if you are already itemizing more deductions than the standard deduction. If you don’t have a lot of other expenses to deduct you have to pay a lot of that interest (without tax benefit) before you see any benefit to itemizing.

Over the 30 years, 200K at 5.5% is just under 409K in total payments (principal and interest only). Fully realizing a 35K tax break will give you about an 8.5% advantage. If much of your yearly tax advantage is not realized due to insufficient other deductions and you are relying largely on interest deductions, your mileage can vary.

In general I don’t understand the tax benefit argument to write offs. It doesn’t make sense to spend a lot of money to save a little unless you were already going to spend that lot of money and the little savings turns out to be a side benefit.

Not the point of the thread, but here is how I’m starting to think of mortgage debt:

You can save significantly more than 35K by paying the loan off early and not paying interest for 30 years. I know that is not a popular argument to make. Seems like most proclaimed financial experts think you should invest the difference and not “tie up” your net worth in your non liquid house. The problem I see with that is you have to make assumptions about rate of return which may not be valid (though in an environment of credit fueled expansion and asset inflation with stagnating wages, the logic is hard to ignore…because in that environment savings and paying off debt are discouraged).

Someday, it will be considered wise to aggressively pay off debt, including your house. The primary thing I try to remember about debt is it presumes upon the future…my future ability to pay. Savings and debt free living is insurance against life’s uncertainty.

[garysears]

I’ve never understood the “benefit” of the interest write-off. In my particular case it doesn’t seem to pencil out. I still think I’m slightly better off NOT itemizing.

But I’ve been hearing the argument over the past several years regarding CA real estate. And I’ve wondered how it could possibly be smart to buy an overpriced house and end up underwater in the long run all for the sake of saving a few thousand in taxes in the short run.

In general I would be in favor of the government NOT subsidizing home ownership at all, especially not mortgages or mortgage rates. It seems to me like efforts to make homes “more affordable” only allow prices to get bid up more, which is actually not more affordable. Seems like “affordable” and “easy credit” are often confused.

Does that mean if I buy this year I’m not going to claim the $8K credit? No. But the existence of that credit make me suspicious that I can save more than that if I wait another year. The $8K credit seems designed to try to instigate a suckers rally. Besides, if I wait to 2010 will I get a $15K credit? How about $50K?

[garysears]

I’ve never understood the “benefit” of the interest write-off. In my particular case it doesn’t seem to pencil out. I still think I’m slightly better off NOT itemizing.

But I’ve been hearing the argument over the past several years regarding CA real estate. And I’ve wondered how it could possibly be smart to buy an overpriced house and end up underwater in the long run all for the sake of saving a few thousand in taxes in the short run.

In general I would be in favor of the government NOT subsidizing home ownership at all, especially not mortgages or mortgage rates. It seems to me like efforts to make homes “more affordable” only allow prices to get bid up more, which is actually not more affordable. Seems like “affordable” and “easy credit” are often confused.

Does that mean if I buy this year I’m not going to claim the $8K credit? No. But the existence of that credit make me suspicious that I can save more than that if I wait another year. The $8K credit seems designed to try to instigate a suckers rally. Besides, if I wait to 2010 will I get a $15K credit? How about $50K?

[garysears]

I’ve never understood the “benefit” of the interest write-off. In my particular case it doesn’t seem to pencil out. I still think I’m slightly better off NOT itemizing.

But I’ve been hearing the argument over the past several years regarding CA real estate. And I’ve wondered how it could possibly be smart to buy an overpriced house and end up underwater in the long run all for the sake of saving a few thousand in taxes in the short run.

In general I would be in favor of the government NOT subsidizing home ownership at all, especially not mortgages or mortgage rates. It seems to me like efforts to make homes “more affordable” only allow prices to get bid up more, which is actually not more affordable. Seems like “affordable” and “easy credit” are often confused.

Does that mean if I buy this year I’m not going to claim the $8K credit? No. But the existence of that credit make me suspicious that I can save more than that if I wait another year. The $8K credit seems designed to try to instigate a suckers rally. Besides, if I wait to 2010 will I get a $15K credit? How about $50K?

[garysears]

I’ve never understood the “benefit” of the interest write-off. In my particular case it doesn’t seem to pencil out. I still think I’m slightly better off NOT itemizing.

But I’ve been hearing the argument over the past several years regarding CA real estate. And I’ve wondered how it could possibly be smart to buy an overpriced house and end up underwater in the long run all for the sake of saving a few thousand in taxes in the short run.

In general I would be in favor of the government NOT subsidizing home ownership at all, especially not mortgages or mortgage rates. It seems to me like efforts to make homes “more affordable” only allow prices to get bid up more, which is actually not more affordable. Seems like “affordable” and “easy credit” are often confused.

Does that mean if I buy this year I’m not going to claim the $8K credit? No. But the existence of that credit make me suspicious that I can save more than that if I wait another year. The $8K credit seems designed to try to instigate a suckers rally. Besides, if I wait to 2010 will I get a $15K credit? How about $50K?

[garysears]

I’ve never understood the “benefit” of the interest write-off. In my particular case it doesn’t seem to pencil out. I still think I’m slightly better off NOT itemizing.

But I’ve been hearing the argument over the past several years regarding CA real estate. And I’ve wondered how it could possibly be smart to buy an overpriced house and end up underwater in the long run all for the sake of saving a few thousand in taxes in the short run.

In general I would be in favor of the government NOT subsidizing home ownership at all, especially not mortgages or mortgage rates. It seems to me like efforts to make homes “more affordable” only allow prices to get bid up more, which is actually not more affordable. Seems like “affordable” and “easy credit” are often confused.

Does that mean if I buy this year I’m not going to claim the $8K credit? No. But the existence of that credit make me suspicious that I can save more than that if I wait another year. The $8K credit seems designed to try to instigate a suckers rally. Besides, if I wait to 2010 will I get a $15K credit? How about $50K?

[garysears]

Here is another problem with the red light cameras :

http://www.motorists.org/blog/6-cities-that-were-caught-shortening-yellow-light-times-for-profit/

I remembered reading about Washington D.C. shortening the yellow lights at camera controlled intersections several years ago to increase revenue from red light runners. So I googled it and came up with the above article about other cities. I believe it was around 2000 or 2001 that I read about the case in Washington. Apparently, the company promised a certain amount of revenue would be generated for the city of D.C if they bought the camera system. The problem was that after it was installed D.C. was either making less than planned or actually losing money because people were obeying the law more than expected. So they dramatically shortened the yellow lights to force more violations of the law. That’s right. They sacrificed public safety and made red light violators out of otherwise law abiding citizens.

Don’t think that can’t happen in S.D. Keep an eye on the length of the yellow lights at camera controlled intersections.

[garysears]

Here is another problem with the red light cameras :

http://www.motorists.org/blog/6-cities-that-were-caught-shortening-yellow-light-times-for-profit/

I remembered reading about Washington D.C. shortening the yellow lights at camera controlled intersections several years ago to increase revenue from red light runners. So I googled it and came up with the above article about other cities. I believe it was around 2000 or 2001 that I read about the case in Washington. Apparently, the company promised a certain amount of revenue would be generated for the city of D.C if they bought the camera system. The problem was that after it was installed D.C. was either making less than planned or actually losing money because people were obeying the law more than expected. So they dramatically shortened the yellow lights to force more violations of the law. That’s right. They sacrificed public safety and made red light violators out of otherwise law abiding citizens.

Don’t think that can’t happen in S.D. Keep an eye on the length of the yellow lights at camera controlled intersections.

[garysears]

Here is another problem with the red light cameras :

http://www.motorists.org/blog/6-cities-that-were-caught-shortening-yellow-light-times-for-profit/

I remembered reading about Washington D.C. shortening the yellow lights at camera controlled intersections several years ago to increase revenue from red light runners. So I googled it and came up with the above article about other cities. I believe it was around 2000 or 2001 that I read about the case in Washington. Apparently, the company promised a certain amount of revenue would be generated for the city of D.C if they bought the camera system. The problem was that after it was installed D.C. was either making less than planned or actually losing money because people were obeying the law more than expected. So they dramatically shortened the yellow lights to force more violations of the law. That’s right. They sacrificed public safety and made red light violators out of otherwise law abiding citizens.

Don’t think that can’t happen in S.D. Keep an eye on the length of the yellow lights at camera controlled intersections.

[garysears]

Here is another problem with the red light cameras :

http://www.motorists.org/blog/6-cities-that-were-caught-shortening-yellow-light-times-for-profit/

I remembered reading about Washington D.C. shortening the yellow lights at camera controlled intersections several years ago to increase revenue from red light runners. So I googled it and came up with the above article about other cities. I believe it was around 2000 or 2001 that I read about the case in Washington. Apparently, the company promised a certain amount of revenue would be generated for the city of D.C if they bought the camera system. The problem was that after it was installed D.C. was either making less than planned or actually losing money because people were obeying the law more than expected. So they dramatically shortened the yellow lights to force more violations of the law. That’s right. They sacrificed public safety and made red light violators out of otherwise law abiding citizens.

Don’t think that can’t happen in S.D. Keep an eye on the length of the yellow lights at camera controlled intersections.

[garysears]

Here is another problem with the red light cameras :

http://www.motorists.org/blog/6-cities-that-were-caught-shortening-yellow-light-times-for-profit/

I remembered reading about Washington D.C. shortening the yellow lights at camera controlled intersections several years ago to increase revenue from red light runners. So I googled it and came up with the above article about other cities. I believe it was around 2000 or 2001 that I read about the case in Washington. Apparently, the company promised a certain amount of revenue would be generated for the city of D.C if they bought the camera system. The problem was that after it was installed D.C. was either making less than planned or actually losing money because people were obeying the law more than expected. So they dramatically shortened the yellow lights to force more violations of the law. That’s right. They sacrificed public safety and made red light violators out of otherwise law abiding citizens.

Don’t think that can’t happen in S.D. Keep an eye on the length of the yellow lights at camera controlled intersections.

[garysears]

Sorry. I’m not a member of congress. There is no employer matched retirement program for me. Please don’t extrapolate benefits congress gives themselves to all federal employees.

Also, I would opt out of SS in a second if I could, but that is not possible. A basic google of that idea suggests the opt out window was closed in 1984 and SS is now mandatory for all federal employees.

Final point. I am a federal (military) employee but I am also a taxpayer like everyone else. Sometimes it seems people suggest government employees get a free ride. There are in fact tax benefits to military service if you are willing to pay the personal price (ie. allowances and tax free pay while serving in combat zone, etc..), but miltary retention issues shows that pay and pensions aren’t everything in life.

I guess the threadjacking is complete.

[garysears]

Sorry. I’m not a member of congress. There is no employer matched retirement program for me. Please don’t extrapolate benefits congress gives themselves to all federal employees.

Also, I would opt out of SS in a second if I could, but that is not possible. A basic google of that idea suggests the opt out window was closed in 1984 and SS is now mandatory for all federal employees.

Final point. I am a federal (military) employee but I am also a taxpayer like everyone else. Sometimes it seems people suggest government employees get a free ride. There are in fact tax benefits to military service if you are willing to pay the personal price (ie. allowances and tax free pay while serving in combat zone, etc..), but miltary retention issues shows that pay and pensions aren’t everything in life.

I guess the threadjacking is complete.

[garysears]

Sorry. I’m not a member of congress. There is no employer matched retirement program for me. Please don’t extrapolate benefits congress gives themselves to all federal employees.

Also, I would opt out of SS in a second if I could, but that is not possible. A basic google of that idea suggests the opt out window was closed in 1984 and SS is now mandatory for all federal employees.

Final point. I am a federal (military) employee but I am also a taxpayer like everyone else. Sometimes it seems people suggest government employees get a free ride. There are in fact tax benefits to military service if you are willing to pay the personal price (ie. allowances and tax free pay while serving in combat zone, etc..), but miltary retention issues shows that pay and pensions aren’t everything in life.

I guess the threadjacking is complete.

[garysears]

Sorry. I’m not a member of congress. There is no employer matched retirement program for me. Please don’t extrapolate benefits congress gives themselves to all federal employees.

Also, I would opt out of SS in a second if I could, but that is not possible. A basic google of that idea suggests the opt out window was closed in 1984 and SS is now mandatory for all federal employees.

Final point. I am a federal (military) employee but I am also a taxpayer like everyone else. Sometimes it seems people suggest government employees get a free ride. There are in fact tax benefits to military service if you are willing to pay the personal price (ie. allowances and tax free pay while serving in combat zone, etc..), but miltary retention issues shows that pay and pensions aren’t everything in life.

I guess the threadjacking is complete.

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