Should i pay all at once or as much as possible or should i take out a mortgage?

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Now in addition since you financed you have the $s you did not put into the home to invest - let's say the whole $160,000. Let's say that earns 5% ($8,000 will be added to your taxable income from earnings). So have you saved on taxes, or should you pay for the home and take the standard deduction. Clue: your deductions other than interest come to about $6,000 - so you get $4,000 extra deductions filing standard deduction which is more than the $2,400 extra with the interest added to your deductions.

As you can see it is not a simple pay/don't pay question. If you have the extra $8,000 cash flow from interest can you contribute more to your 401k and IRAs to maximize you tax savings? Or, can you do more with no mortgage payment? You have to analyze your whole financial picture!!!

Should i pay all at once or as much as possible or should i take out a mortgage?

You need to do some math. If you borrow money at 6% and the inflation rate is 3%, you're getting real money for much less than the 6%. You can deduct the interest on your taxes, so for every $1000 in interest you'll save approx $250. Deduct this savings from the cost of the loan, and the real cost of the borrowed money is even less. What I would do is just make additional payments every month that goes toward lowering the principal, that way the life of the loan gets shortened and you can use the deductions of the interest to your advantage. If you don't pay much extra and invest the money instead, you could be making 5-7% on it while borrowing it at 6%. later, inflation may get you clser to 8-10% on money that costs you 6% or less. Looks like the real cost of the money to you is about 3-4%, which is a good deal.

Should i pay all at once or as much as possible or should i take out a mortgage?

This is a question for Dave and J of the Dave and J Show. The Dave and J Show is a mortgage radio show and you can listen on the web at www.daveandj.com or on iTunes. You can emial these dudes and they will answer every question you have. they might even answer it on the air. All I know is these guys are professionals and they seem to know everything...lol

Go check them out they wont let you down i promise!

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Should i pay all at once or as much as possible or should i take out a mortgage?

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