Author Topic: A New Record?  (Read 9381 times)

avid investor

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Re: A New Record?
« Reply #15 on: July 13, 2015, 09:41:29 AM »
My buddy pays his mortgage with his HELOC.  He has figured out he will save X amount of dollars over the long term (because the HELOC interest rate is even lower than his mortgage).  He pays a chunk of his mortage with the HELOC and then pays the HELOC off with his normal mortgage payments.  When the HELOC gets to zero he repeats.

Is he part of the Greek government?

Why doesn't he just pay off the mortgage?

If I had a lot of cash, I know that I WOULD NOT pay off the mortgage.  Let's see... 3.375% mortgage (tax deductible) vs. 9% income at LC for investing the cash .... Hmmm...

BruiserB

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A New Record?
« Reply #16 on: July 13, 2015, 06:50:33 PM »

My buddy pays his mortgage with his HELOC.  He has figured out he will save X amount of dollars over the long term (because the HELOC interest rate is even lower than his mortgage).  He pays a chunk of his mortage with the HELOC and then pays the HELOC off with his normal mortgage payments.  When the HELOC gets to zero he repeats.

Is he part of the Greek government?

Why doesn't he just pay off the mortgage?

If I had a lot of cash, I know that I WOULD NOT pay off the mortgage.  Let's see... 3.375% mortgage (tax deductible) vs. 9% income at LC for investing the cash .... Hmmm...

Yep....I have an amount equal to half of what I owe on my mortgage invested in Lending Club that is yielding me more in monthly interest than my mortgage is charging for principal and interest.  Why would I cash in my Lending Club notes and pay my mortgage down?


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Randawl

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Re: A New Record?
« Reply #17 on: July 14, 2015, 01:37:26 PM »
My buddy pays his mortgage with his HELOC.  He has figured out he will save X amount of dollars over the long term (because the HELOC interest rate is even lower than his mortgage).  He pays a chunk of his mortage with the HELOC and then pays the HELOC off with his normal mortgage payments.  When the HELOC gets to zero he repeats.

Is he part of the Greek government?

Why doesn't he just pay off the mortgage?

If I had a lot of cash, I know that I WOULD NOT pay off the mortgage.  Let's see... 3.375% mortgage (tax deductible) vs. 9% income at LC for investing the cash .... Hmmm...

I could see the spread becoming almost negligible a small segment of the population.  For those that can not deduct their mortgage interest, are past income limits for traditional/ROTH IRA's, and whose tax rates on that 9% (which is a bit optimistic for the average person on a completed portfolio) when including state and federal approach ~40-50% or more.  The 5-9% most people will hope to end up making (assuming no downturn) results in a spread that is not too attractive considering the risks.