Madison MoneySports - Personal Finance Thread

[Kaan]

Make sure to pay attention to mortgage interest caps on your taxes. You may not be close, but the impact is lessened if you can't deduct the interest you pay on the extra payment (might be all principal, depending). Also make sure they're actually paying the principal every two weeks versus holding the money and paying it monthly. Lastly, there are sometimes fees for prepaying or switching to biweekly, so make sure you're not spending money to try and save money.

I did the math and determined I could build wealth faster by not paying ahead and putting that money in the market. In Rex's example, I could make more than the $13.8k over 25 years by keeping that one extra payment a year and investing it. A single $1,000 payment compounds to almost $10k over 30 years (8% return) and you're doing an extra payment every year. Interest rates being ~half of annual rate of investment return helps a lot. You're basically borrowing money at 3-4% and using it to make retirement income at 8%. That said, some people just want to pay off their mortgage... but I don't fall in that camp.

thats good info to chew on... thanks!