Quote:
Originally Posted by afchic
This is the house we plan to retire in. Our market has remained relatively stable during the housing crisis, and I can't see us being able to buy the house back cheaper than what we owe right now.
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Fair enough.
(Though the important numbers on the sell/rebuy are the difference between sale price and buy price, not on how much is owed vs rebuy)
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If you don't pay it off:
"Expense"
-the amount you pay in interest
"Profit"
-the amount you get in tax deduction on the interest
-the amount you can
net profit if the money from principal and interest were used somewhere else
(expected rate of return, future taxes and inflation are among the things which will affect
this)
If you do pay it off:
"Expense"
-the amount you lose in tax deductions
"Profit"
-the amount you don't pay in interest
(this is a "guaranteed" rate of return)
Comes down to future economic expectations and risk tolerance.