paying off mortgage
- Thread starter martin123
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With inflation running at between 2% and 3% your mortgage at 3.25% is almost free money. Invest your money wherever you are comfortable. You should be able to make a much better return than 3.25% in any number of real estate or mortgage or bond investments that feature relatively low risk. Do your due diligence fully and make a choice you can sleep comfortably with.
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I agree with both posts above. Do what you are comfortable with. The option to capitalize on your investment in Real Estate is for real. You can do so much better with your money than to just pay down the mortgage. There are plenty of options.
Todor
Todor
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QUOTE (fxian @ Nov 28 2008, 12:05 PM) Pay it almost off (leave $1) and then refinacing out and invest the money somewhere you feel comfortable. Then the interest for the mortgage would be tax deductable. (ask your accountant if this is do-able)
I agree with this idea (also known as the Smith Manoeuvre). You effectively stop paying interest on your home out of your after-tax dollars (thus personal costs). The interest on the funds taken out for investment is now tax-deductable.
I agree with this idea (also known as the Smith Manoeuvre). You effectively stop paying interest on your home out of your after-tax dollars (thus personal costs). The interest on the funds taken out for investment is now tax-deductable.
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I agree. Pay it down and pull the money back out to invest with a tax deduction.
However check around first and see how much you will be able to get back out if
you are planing a HELOC. Banks are tightening up.
However check around first and see how much you will be able to get back out if
you are planing a HELOC. Banks are tightening up.
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QUOTE (martin123 @ Nov 27 2008, 01:00 PM) My mortgage is 142000, if i have the cash to pay, should I pay it off or in vest in GIC or the market. I have a variable morgage at 3.25% at this moment.
With a mortgage rate this low there is NO RUSH to pay it down .. in fact skip a payment if allowed .. unless you are very close to old age and wish to live off the passive income only ... use surplus cash to build a reserve, then to invest or buy more real estate .. with real inflation @ 6% anything below that is free money !
To build an asset base to retire off you must built UP the asset base, with OPM (other people`s money) i.e. investors or certainly low mortgages ! And this means investing in the right asset classes with cash + mortgage where the income off this asset class exceeds the mortgage !
With a mortgage rate this low there is NO RUSH to pay it down .. in fact skip a payment if allowed .. unless you are very close to old age and wish to live off the passive income only ... use surplus cash to build a reserve, then to invest or buy more real estate .. with real inflation @ 6% anything below that is free money !
To build an asset base to retire off you must built UP the asset base, with OPM (other people`s money) i.e. investors or certainly low mortgages ! And this means investing in the right asset classes with cash + mortgage where the income off this asset class exceeds the mortgage !
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QUOTE (martin123 @ Nov 27 2008, 03:00 PM) My mortgage is 142000, if i have the cash to pay, should I pay it off or in vest in GIC or the market. I have a variable morgage at 3.25% at this moment.
Thanks
Martin
Martin, I would strongly suggest that you do not invest today in GIC`s or the market. You have 1 or 2 options if you wish to invest. You could fix your variable rate at 3.25% and take the $142,000.00 and invest it in multi-residential real estate in cities or areas that have 1% or lower vacancy rates. If you buy correctly, you should get a 12-15% return on that money. When the market goes back up (which it ultimately will in 2-3 years), the returns will be even higher. Be sure to incorporate a separate corporation for each rental building. Also, speak to your accountant to see what the tax implications will be.
Moishe Alexander
President, Canadian Funding Corporation
www.canadianfundingcorporation.com
Thanks
Martin
Martin, I would strongly suggest that you do not invest today in GIC`s or the market. You have 1 or 2 options if you wish to invest. You could fix your variable rate at 3.25% and take the $142,000.00 and invest it in multi-residential real estate in cities or areas that have 1% or lower vacancy rates. If you buy correctly, you should get a 12-15% return on that money. When the market goes back up (which it ultimately will in 2-3 years), the returns will be even higher. Be sure to incorporate a separate corporation for each rental building. Also, speak to your accountant to see what the tax implications will be.
Moishe Alexander
President, Canadian Funding Corporation
www.canadianfundingcorporation.com