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#21
08-21-2005, 03:15 PM
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Re: paying off my parent\'s mortgage..help needed
[ QUOTE ]
Just pay it off as the bills come due. If it's been refinanced anytime in the last 10 years the rate is so low, you'll do better keeping the money and investing it elsewhere. [/ QUOTE ] 
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#22
08-21-2005, 03:28 PM
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Re: paying off my parent\'s mortgage..help needed
her intestest rate is 6.5%, do you still think its better to pay monthly and invest, or to pay it off as a whole.
the stock market has returned 10% annually (on average) since the 30's. by paying off the entire 50k, you restrcit yourself from investing that 50k (oppurtunity cost) while it doesnt probably matter to you right now, it should. one of the best ways to build wealth is to have your money working for you, and not the other way around. honestly, a mortgage is one of the best things to have. the old school thinking that mortgages needed to be paid off come from the long dark days ago when a bank could call in the note on your house at will. fortunatly there are laws that protect against this now (making a mortgage a risk free loan). there are other advanteges, but since that wasnt your original question, ill leave it to you to look into it further.
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#23
08-21-2005, 03:41 PM
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Re: paying off my parent\'s mortgage..help needed
[ QUOTE ]
her intestest rate is 6.5%, do you still think its better to pay monthly and invest, or to pay it off as a whole. the stock market has returned 10% annually (on average) since the 30's. by paying off the entire 50k, you restrcit yourself from investing that 50k (oppurtunity cost) while it doesnt probably matter to you right now, it should. one of the best ways to build wealth is to have your money working for you, and not the other way around. honestly, a mortgage is one of the best things to have. the old school thinking that mortgages needed to be paid off come from the long dark days ago when a bank could call in the note on your house at will. fortunatly there are laws that protect against this now (making a mortgage a risk free loan). there are other advanteges, but since that wasnt your original question, ill leave it to you to look into it further. [/ QUOTE ] if you ever look at at how a mortgage is paid off (you can use the mortgage calculator at bankrate.com) you know that on the back end of the loan you're primarily paying the principal w/ little interest. the bank front loads all the interest in the early years. so that 6.5% interest rate was really paid for in the early years.
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#24
08-21-2005, 04:40 PM
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Re: paying off my parent\'s mortgage..help needed
[ QUOTE ]
[ QUOTE ] Isnt the USA, land of the free, the greatest country on Earth... what a land where you have to pay a tax to give your money that has already been taxed to someone else. [/ QUOTE ] dont even get me going on this...i have money thats been taxed THREEEEEEE times....and gift tax...land appreciate type taxes and inheritence r what i hate with a PASSION [/ QUOTE ] OMG the government is so lame. You had the foresight to be born into a rich family and this is how they treat you?? Unbelievable.
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#25
08-21-2005, 04:44 PM
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Do NOT hire a financial advisor.....
...Unless they are wealthy beyond belief. You are better off listening to those who are actually doing what they preach.
"Hear and take advice from those whom you aspire to be like. Ignore everyone else." As far as the mortgage is concerned, your first step is to have your mom put you on the deed and start making payments for her.
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#26
08-21-2005, 05:01 PM
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Re: paying off my parent\'s mortgage..help needed
[ QUOTE ]
the thing is that my mom is simple folk and i want to help her out financially, but she isnt really crazy about anyhting, and really loves her 450/wk daycare job. her intestest rate is 6.5%, do you still think its better to pay monthly and invest, or to pay it off as a whole. obviously, she is for the latter, being simple folk. [/ QUOTE ] Ah. I understand. Peace of mind for the folks is probably worth the incremental opportunity cost.
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#28
08-21-2005, 05:06 PM
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Re: paying off my parent\'s mortgage..help needed
[ QUOTE ]
[ QUOTE ] its currently at 50k left on their mortgage. Can i jsut write them a check for 50k or will this incur 'gift tax'? please help. [/ QUOTE ] Oh my God. Your parents had you almost 20 years before being close to paying off their mortgage? What selfish assholes. [/ QUOTE ] good post
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#29
08-21-2005, 06:51 PM
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Re: paying off my parent\'s mortgage..help needed
[ QUOTE ]
Under the current estate and gift tax regime, you have and exclusion of 1.5 million. (It will increase to 2 million in '06,'07 and '08 and 3.5 million in '09) You will not have to pay any taxes on the 50k, but you still have to file. 28k will be deducted from your 1.5 million exclusion amount(You get an annual 11k per donee exemption). You could get 44k to them w/o having any tax consequences at all by giving 11k each to both your mother and father on both Dec. 31 of this year and Jan. 1 of next year. [/ QUOTE ] This is the correct answer. The 44k idea is a good one too.
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#30
08-21-2005, 09:04 PM
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Re: paying off my parent\'s mortgage..help needed
[ QUOTE ]
Have them make a neteller account, transfer through neteller, don't tell the government [censored]. [img]/images/graemlins/smile.gif[/img] There might be something I'm missing here, though. [/ QUOTE ] they still make u claim it...there r sections for claiming stuff like this (ie. off shore accounts, etc) and if they find out u fibbed ur in big trouble!
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