loan for vacation home or take equity loan on present home

[indianajohn]

What is the name of your state? Florida We would like to erect a small vacation home in upstate NY. I have the building and the land. My present home still has a small amount left on the loan. We would like to pay it off and get as close as possible to being debt free before we proceed. What is the wiser thing to do? Take out a small constrution loan to finish the vacation home or take an equity loan on our present home?

 

[pojo2]

Equity loan or construction loans may carry a bit higher interest rate. Talk to your local banker or Mortgage Company and they can sit down with your financial records and help you decide.

Though it FEELS secure I would never completely pay off the mortgage.

 

[LindaP777]

Though it FEELS secure I would never completely pay off the mortgage.

Just curious, why would you say that? (I, too, look forward one day to having all my mortages paid off.)

 

[shell007]

Just curious, why would you say that? (I, too, look forward one day to having all my mortages paid off.)

tax deduction!!!

 

[LindaP777]

tax deduction!!!

To my way of thinking . . . I would rather have no monthly payments then a tax deduction. When your loan is paid down so far, you're paying very little interest anyway, so very little tax deduction.

 

[shell007]

To my way of thinking . . . I would rather have no monthly payments then a tax deduction. When your loan is paid down so far, you're paying very little interest anyway, so very little tax deduction.

I can see your point if the loan is almost paid off anyway.

 

[kat1963]

tax deduction!!!

BUT you are paying $1.00 out for approximately .30 cents of *tax relief*. Better off having an emergency fund, retirement & investing.

You never EVER want to compromise your homestead!! If you simply have to build instead of waiting until you can pay cash then take a construction loan.

Plant your seeds wisely!

KAT

 

[LindaP777]

Though it FEELS secure I would never completely pay off the mortgage.

So, I was still wondering from pojo2 his thoughts on the comment . . .

 

[indianajohn]

My loan is almost paid off. I look at it this way for the little bit I get for a deduction it's not worth having the payment. Am I wrong here? I hate to think how much the house cost me over 30 years just for the interest alone.

 

[LindaP777]

My loan is almost paid off. I look at it this way for the little bit I get for a deduction it's not worth having the payment. Am I wrong here? I hate to think how much the house cost me over 30 years just for the interest alone.

We think alike, others may have a different idea.

 

[shell007]

BUT you are paying $1.00 out for approximately .30 cents of *tax relief*. Better off having an emergency fund, retirement & investing.

You never EVER want to compromise your homestead!! If you simply have to build instead of waiting until you can pay cash then take a construction loan.

Plant your seeds wisely!

KAT

Thank you for your wise words, but emergency funds, retirement, investing, and college funds ARE ALREADY WELL TAKEN CARE OF, but again thank you. My homestead will never be comprised.

My seeds have been planted and ARE THRIVING!!!

We use our home(s) for tax right-offs. We consider them investments.

 

[pojo2]

I am rushed but will be back for more in depth answer.

You have tons of money just sitting in that house, what if you need money, if paid off you home is no longer elegible for a MORTGAGE so the money borrowed against it is going to cost you more money.

 

[cedric]

I am rushed but will be back for more in depth answer.

You have tons of money just sitting in that house, what if you need money, if paid off you home is no longer elegible for a MORTGAGE You are absolutley wrong.....There are no rules in any state that says you cannot take out a new mortgage on a home that is free and clear. so the money borrowed against it is going to cost you more money.

You can take cash out to 100% in most states.....TX being an exception to that and in some states up to 125% of the value......with or without a currnet mortgage.

 

[LindaP777]

You have tons of money just sitting in that house, what if you need money, if paid off you home is no longer elegible for a MORTGAGE so the money borrowed against it is going to cost you more money.

HUH???????