Should I Pay My Mortgage Off Early?

Should I Pay my Mortgage Off Early? This is actually a FAQ – a frequently asked question, so I thought I’d spend a little time on it here. Some other mortgage-related topics we’ve addressed are these:

  • How Much House Can I Afford?
  • Your First Home Purchase
  • How Much HouseMortgage Can I Afford?
  • Using an IRA for a First Home Purchase
  • The Fifteen Year Mortgage

A Mortgage Example
Let’s use a sample mortgage. $400,000 borrowed, at 4.5%, over 30 years. The monthly payment is $2026.74. That means over the life of the mortgage you will have paid $729,626.85 in principal and interest payments to repay that $400,000 loan – and, of course, $329,626.85 of that amount is interest.

You pay interest each month on the unpaid balance. In early years your payment is mostly interest, with very little principal repayment. In later years, situation reverses: you pay mostly principal, with much of the interest having been paid in the earlier years.

Using our sample mortgage,...

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The Big Tax Code Revision

Major news! The tax code revision is now law. In this blog post I want to review the major changes on individual tax returns. In subsequent posts I’ll cover the changes to business taxation, and then given an opinion on the whole thing. This will of necessity be a long post, so please bear with me.

The new individual provisions mostly take place in 2018, and expire at the end of 2025. The changes to corporate changes are permanent. This has to do with the arcane way bills move through the legislative process in Congress.

The general flow of the form 1040, or the long form, is this:

Income goes on lines 7-22
This is taxable income from wages and business interests, and from investment earnings. Taxable income also includes alimony received, capital gains and losses, IRA and retirement account distributions, rental real estate income, farm income, unemployment compensation, and social security benefits. Yes; social security benefits are taxable; see a special

Adjustments to...

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