We paid cash for ours, we own it, no bs no extra loans.... I pay cash for anything and everything I can.
Should I finance the costs of building a pool or should I pay cash
- Thread starter Ssalter98
- Start date
Actually I would say it takes way more discipline to live debt-free than to use debt, but that's a personal financial choice.
One point that needs to be clarified is that everyone seems to be using two term interchangeably implying they are the same - Home Equity Loan and Home Equity Line of Credit (HELOC). These ARE NOT equivalent.
HELs are one time lump-sum draw of equity from your home typically with a fixed amortization schedule (term and interest rate fixed).
HELOCs are like credit cards with a fixed credit limit and revolving credit line. Interest rates are VARIABLE on most HELOCs.
The deductibility of your interest can also vary depending on the terms, how much you've borrowed, your AGI and how much current mortgage interest you have to deduct (total mortgage interest deduction is limited to $100,000).
One point that needs to be clarified is that everyone seems to be using two term interchangeably implying they are the same - Home Equity Loan and Home Equity Line of Credit (HELOC). These ARE NOT equivalent.
HELs are one time lump-sum draw of equity from your home typically with a fixed amortization schedule (term and interest rate fixed).
HELOCs are like credit cards with a fixed credit limit and revolving credit line. Interest rates are VARIABLE on most HELOCs.
The deductibility of your interest can also vary depending on the terms, how much you've borrowed, your AGI and how much current mortgage interest you have to deduct (total mortgage interest deduction is limited to $100,000).
Sunny, I agree with everything you said except for this. The deduction of equity secured / mortgage interest is only limited by the amount of the loan.
From IRS Publication 936
http://www.irs.gov/publications/p936/ar02.html
"In most cases, you can deduct all of your home mortgage interest. How much you can deduct depends on the date of the mortgage, the amount of the mortgage, and how you use the mortgage proceeds.... Mortgages you took out after October 13, 1987, to buy, build, or improve your home (called home acquisition debt), but only if throughout 2013 these mortgages plus any grandfathered debt totaled $1 million or less ($500,000 or less if married filing separately)".
There's always a chance the tax code will change. But, taking away this interest deduction isn't very likely.
If you really want to save money on a pool, don't build one. Buy another home with an existing and already deprecated (in dollar value) pool. You'll spend less than a quarter to half in total value of the new house pool value (including closing costs) and save a ton.
^^^^^^^
You caught it before I was able to save my updates. Sorry, I suffer from FFT - fat finger typing and Tapatalk makes it worse.
You caught it before I was able to save my updates. Sorry, I suffer from FFT - fat finger typing and Tapatalk makes it worse.
Cool. then we agree
On the deductibility of mortgage interest, yes.
On the use of debt to finance luxury purchases and attempt to beat the interest paid by investing, probably not.
Human nature never lets math or facts stand in the way of an irresistible purchase
Human nature never lets math or facts stand in the way of an irresistible purchase
On this we still agree