Comments on: How beneficial is it to make extra mortgage payments each year? http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/ A blog about being a landlord and investing in real-estate. Fri, 12 Mar 2010 01:19:02 +0000 http://wordpress.org/?v=2.7.1 hourly 1 By: Tom Allen http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/comment-page-1/#comment-4055 Tom Allen Sat, 14 Jul 2007 17:54:28 +0000 http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/#comment-4055 I suppose ultimately there is always a risk involved no matter what you do but you certainly make a good argument for keeping your cash-flow healthy to make other investments. It really all comes down to an individual understanding the numbers properly. Interest only mortgages are a very good example of this. They can be a great financial product for somebody that properly understands the advantages and disadvantages but they can be a complete disaster for people who don't do their research properly. I run a mortgage site myself and you wouldn't believe some of the questions I have been asked. Ultimately, I think a lot of it comes down to having a proper understanding of the industry. I suppose ultimately there is always a risk involved no matter what you do but you certainly make a good argument for keeping your cash-flow healthy to make other investments. It really all comes down to an individual understanding the numbers properly.

Interest only mortgages are a very good example of this. They can be a great financial product for somebody that properly understands the advantages and disadvantages but they can be a complete disaster for people who don’t do their research properly. I run a mortgage site myself and you wouldn’t believe some of the questions I have been asked.

Ultimately, I think a lot of it comes down to having a proper understanding of the industry.

]]> By: Berry http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/comment-page-1/#comment-50 Berry Wed, 06 Dec 2006 09:47:45 +0000 http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/#comment-50 There is a lot to be said for the security of owning your own home. Then only the government can seize it if they choose to. If you find properties where you are paying out $1000 and getting $2000 a month.... call me... I'll buy them from you.... all day long.... every day... until I have sapped the last banker dry (as if a banker would care if the deal was good). We just paid cash for two rental properties because they were such a good deal... and since we had the money why pay the bank interest... when we need the cash for another good deal we'll just take the equity out of them. Keep in mind Scott that not everyone itemizes their taxes and if you don't itemize you don't see the tax benefits of your mortgage interest. I just love it when people throw up tax savings when they decide to spend an extrat $50K they don't have on a house. There is a lot to be said for the security of owning your own home. Then only the government can seize it if they choose to.

If you find properties where you are paying out $1000 and getting $2000 a month…. call me… I’ll buy them from you…. all day long…. every day… until I have sapped the last banker dry (as if a banker would care if the deal was good).

We just paid cash for two rental properties because they were such a good deal… and since we had the money why pay the bank interest… when we need the cash for another good deal we’ll just take the equity out of them.

Keep in mind Scott that not everyone itemizes their taxes and if you don’t itemize you don’t see the tax benefits of your mortgage interest. I just love it when people throw up tax savings when they decide to spend an extrat $50K they don’t have on a house.

]]> By: Scott Shamrock http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/comment-page-1/#comment-49 Scott Shamrock Tue, 05 Dec 2006 23:50:53 +0000 http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/#comment-49 Personally I would always rather use the bank's money rather than my own. By paying down the mortgage one also loses the tax benefits. If you cant find better investments out there for the extra money you have then keep searching because they are out there. Scott www.educate2motivate.com Personally I would always rather use the bank’s money rather than my own. By paying down the mortgage one also loses the tax benefits. If you cant find better investments out there for the extra money you have then keep searching because they are out there.

Scott

http://www.educate2motivate.com

]]> By: A leisurely ride through the Carnival at Three Oceans Real Estate http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/comment-page-1/#comment-48 A leisurely ride through the Carnival at Three Oceans Real Estate Tue, 05 Dec 2006 05:45:13 +0000 http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/#comment-48 [...] Landlord Shmandlord talks about the pros and cons of making extra mortgage payments on an investment property. I found myself scratching my head at the example of a property with a $1000 per month mortgage payment and $2000 per month rental income…and then remembered: not everybody lives in California! [...] [...] Landlord Shmandlord talks about the pros and cons of making extra mortgage payments on an investment property. I found myself scratching my head at the example of a property with a $1000 per month mortgage payment and $2000 per month rental income…and then remembered: not everybody lives in California! [...]

]]> By: Carol Williams http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/comment-page-1/#comment-46 Carol Williams Mon, 04 Dec 2006 21:56:51 +0000 http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/#comment-46 I believe paying down the primary residence to the point of having a large equity (for an investment line of credit) kills two birds with one stone. I believe paying down the primary residence to the point of having a large equity (for an investment line of credit) kills two birds with one stone.

]]> By: Craig http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/comment-page-1/#comment-45 Craig Mon, 04 Dec 2006 17:47:10 +0000 http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/#comment-45 I like the idea for a personal residence. I believe it is smart to pay down the mortgage as quickly as possible on owner occupied property, but maintaining a home equity line that can be leveraged in case of an emergency or to utilize for short investment capital needs such as flipping/rehabbing. I agree with you that as for investment property, the owner would be better off reinvesting the positive cash flow into other cash flowing properties. The bottom line is, whether it is personal or investment, a person must analyze the likely return on investment and then consider the risk levels as well. Personally, I like the idea of acquiring 1 property per year (or whatever time frame is comfortable), then after 4,6 or 10 years sell the first few properties and use the capital gains to pay off the other properties so then the investor has several fully cash flowing properties. I like the idea for a personal residence. I believe it is smart to pay down the mortgage as quickly as possible on owner occupied property, but maintaining a home equity line that can be leveraged in case of an emergency or to utilize for short investment capital needs such as flipping/rehabbing. I agree with you that as for investment property, the owner would be better off reinvesting the positive cash flow into other cash flowing properties. The bottom line is, whether it is personal or investment, a person must analyze the likely return on investment and then consider the risk levels as well. Personally, I like the idea of acquiring 1 property per year (or whatever time frame is comfortable), then after 4,6 or 10 years sell the first few properties and use the capital gains to pay off the other properties so then the investor has several fully cash flowing properties.

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