"stan" wrote in message
...
On Sep 25, 11:19 pm, "Dimitrios Paskoudniakis"
wrote:
"stan" wrote in message

...
On Sep 25, 1:48 pm, LouB wrote:





Dimitrios Paskoudniakis wrote:

"Master Betty" wrote in message
...

I cut up all my credit cards and haven't used one since. We only have
our mortage and a small car loan left.
You are missing an easy opportunity to have a credit card company give
you hundreds of dollars of free money each year.

I have an AmEx Blue Cash card, which gives me a 5% rebate on
groceries,
gas, and prescription drugs, and 1.25% on everything else. I pay in
full each month, get a free grace period, don't write any checks,
don't
have to carry around cash, and once per year I get a credit on my
account of many many hundreds of dollars. I have a VISA that gives a
1% rebate when a merchant doesn't accept AmEx, and I get that rebate
credit the next month.

I always pay in full each month.

The credit card company is paying me to use their card.

Of course others use cards in this manner that give other types of
rewards (ie airline miles). My father's card is through the same bank
as his mortgage, so his card rebate goes right toward extra principal
payment on his mortgage.

I can't imagine why anyone who is creditworthy would not take
advantage
of this opportunity rather than do what you are doing.

Good advice.- Hide quoted text -

BTW Home loans/mortgages.

$100,000. at 6% for various time periods. Monthly payments.

20 years $716 mo total repay 172,000; Interest = 72,000 or 1.72 times
original cost
25 years $644 mo repay 193,000; interest = 93,000 1.93 times cost
30 years $600 mo repay 216,000; interest = 116,000 2.16 times cost
40 years $550 mo repay 264,000; interest = 164,000 2.64 times cost

Just a thought.

So we built our own some 40 years ago and the most ever owed was
$12,000, which we disposed of asap. despite a then low salary. So no
mortgage!

You can scale this up or down. For example $50,000 as above would be
exactly half of the 100,000 numbers .
Also for slight difference in interest rate, say 5% instead of 6, you
can ratio it a bit and not be too far out, for mental calculation.
e.g. 5/6 x 600 per month = $500. i.e. somewhere between $500 and $600
per month.
Then then calculate it properly using an on-line progarmme such as
http://www.bretwhissel.net/amortization/amortize.html

Good luck; and aside from credit cards, after all it's OUR money we
are paying for housing and home repairs.

__________________________________

I don't know about Canada, but in the USA you deduct the mortgage interest
paid each year from your income when determining income tax.

I live in the state of Maryland, and pay 25% USA income tax, and 8%
Maryland/local income tax, so about 33% of the mortgage interest (25%+8%)
is
how much my income taxes are reduced. For example, if someone in Maryland
pays $12,000 in the first year of their mortgage in interest and are in
the
25% USA bracket, their US tax bill is reduced by $3,000 (25%) and their
Maryland tax bill is reduced by $960 (8%). So where you are adding the
$12,000 interest in your calculation, you need to subtract about 1/3 of
that
due to reduced taxes. So you need to multiply all of your above ratios by
2/3.

If you invest the saved taxes in a long-term investment that grows on
average 10% per year, and the mortgage interest is 5%, you are better off
investing that money rather than paying down the mortgage. Your ratios
also
aren't yet factoring this in.

But you know all this.- Hide quoted text -

- Show quoted text -
..
That makes a lot of sense. But;
Not that way in Canada. No deduction of interest from income tax!
Either federal or provincial).
However if/when you sell your family home and make a profit there is
no income tax payable.
Also there is no income tax on 'winnings', prizes or gifts.

____________________

In the USA, there is no tax on the increased value of the home when you sell
up to US $500,000 more than the purchase price. Also, you can subtract from
your sales value all costs to improve your home during ownership. If you
invest US $100,000 to improve your home, you can sell it for up to US
$600,000 more than the purchase price without incurring tax on the gain. If
you still sell for more, you only pay tax on the excess. Pretty hard to do,
especially in this market, except for a tiny fraction of extremely
high-priced homes.