Programs: AA-Hilton-Raddison-BA-Benihana.. ALL PLATINUM LT
Posts: 766
Need help : paying off house mortgage and maximizing points earning.
Not sure if this is the right place to ask, but here’s my deal. Im getting ready to pay off leftovers of my mortgage – approximately 40K, and would like to maximize points earning potential.
Here’s what I have – 4 BB cards with 5K each load per month. Meaning I can pay 20K worth of payments from CC -> BB -> Mortgage -> Cash to pay CC Bills. It will take me 2 month to pay 40K thus BB fees + Interest, but I earn miles.
Do you see any other schemes to use 40K cash and earn more miles/points in more efficient /productive way?
Other than the idea of 'freedom', why would you ever pay off your mortgage? You have the lowest rate you can have on money, and you get a deduction on any interest you pay. I guess toward the end of your note you aren't paying much in interest, but still, it's something.
there are reasons to pay off a mortgage, like if you wanted to buy another property for investment then your monthly payments would drop a lot plus that much more in equity you can use for leverage to getting a new loan. Besides even 3% interest on a $100,000 home is $3,000 a year, not something i'd be looking forward to paying. =)
Programs: AA-Hilton-Raddison-BA-Benihana.. ALL PLATINUM LT
Posts: 766
Quote:
Originally Posted by eltex
Other than the idea of 'freedom', why would you ever pay off your mortgage? You have the lowest rate you can have on money, and you get a deduction on any interest you pay. I guess toward the end of your note you aren't paying much in interest, but still, it's something.
Its still "interest" on 40K and I hate paying banks. I have zero liability and always pay off my purchases. Never had any student loans either. Debt free
Its still "interest" on 40K and I hate paying banks. I have zero liability and always pay off my purchases. Never had any student loans either. Debt free
I think if you have a 40k mortgage you can't say that you have zero liabilities. But I admire your discipline and understand your desire to get rid of the mortgage.
Programs: AA-Hilton-Raddison-BA-Benihana.. ALL PLATINUM LT
Posts: 766
Quote:
Originally Posted by zitsky
I think if you have a 40k mortgage you can't say that you have zero liabilities. But I admire your discipline and understand your desire to get rid of the mortgage.
Well, I guess this is my last one of few I ever had.
Need help : paying off house mortgage and maximizing points earning.
People also forget this is a deduction, not a credit so it isn't like you get the interest mo say back. It only helps adjust your income. Each person needs to calculate the real cost/savings versus alternative investments. For me it just barely does NOT make sense to pay off my house, but it isn't a no-brainer.
People also forget this is a deduction, not a credit so it isn't like you get the interest mo say back. It only helps adjust your income. Each person needs to calculate the real cost/savings versus alternative investments. For me it just barely does NOT make sense to pay off my house, but it isn't a no-brainer.
$3,000 a year in annual savings on $100,000 is not worth it? it's more than what CD's and Savings etc are DEFINATELY paying at the moment, and we don't know if he's paying 6-7% or more which is possible.
Also freeing up your monthly payments will allow you to increase your chance at a loan for another property or a business loan. imo this is personally a no brainer, considering if he has $40,000 to pay off he should have some additional funds to cover things in case .... happens, but the amount of funds you need incase .... happens should be rather low if you don't have a mortgage
People also forget this is a deduction, not a credit so it isn't like you get the interest mo say back. It only helps adjust your income. Each person needs to calculate the real cost/savings versus alternative investments. For me it just barely does NOT make sense to pay off my house, but it isn't a no-brainer.
$3,000 a year in annual savings on $100,000 is not worth it? it's more than what CD's and Savings etc are DEFINATELY paying at the moment, and we don't know if he's paying 6-7% or more which is possible.
Also freeing up your monthly payments will allow you to increase your chance at a loan for another property or a business loan. imo this is personally a no brainer, considering if he has $40,000 to pay off he should have some additional funds to cover things in case .... happens, but the amount of funds you need incase .... happens should be rather low if you don't have a mortgage
It isn't a question of the savings, it is the opportunity cost. If he pays off the mortgage he misses the opportunity to do something else with that money. If he chooses to make an investment paying a 12% returns he is better off keeping the mortgage. Everyone's situation is different. For me paying off my mortgage doesn't make sense as my investments are paying abetted return. If DC takes us over a fiscal cliff I might change my mind...
Programs: DL DM MM, AA Gold MM, Hilton Diamond, PC Platinum, Marriott Platinum, Hertz PC
Posts: 589
Quote:
Originally Posted by eltex
Other than the idea of 'freedom', why would you ever pay off your mortgage? You have the lowest rate you can have on money, and you get a deduction on any interest you pay. I guess toward the end of your note you aren't paying much in interest, but still, it's something.
Having a paid off mortgage on your home is one of the most secure things to have. People talk about low rates and better returns, but not the risk factor in virtually any of those higher rates of returns. The piece of mind I think lowered my blood pressure 20 points.
It might be easier to use a debit card attached to a bank account. Citi bank, Suntrust and another bank all have points earning checking accounts. So far I've only seen .5 mile per dollar, but I am thinking of investigating this option myself. My family buys and sells a couple of houses every year, but I really can't see an escrow company happily using a debit card to fund 100 or 200K in purchase money funds. They have strict guidelines to prevent money laundering.
I do not believe the same restrictions would apply to paying down an existing mortgage with a debit card, but how exactly would you be doing this? Bringing the debit card to the branch office? Writing a check from your Bluebird account?
