Mortgage Payoff

[docjan7]

should I payoff my mort. today or wait till later in the week, 2019?

[Carl]

Take your pick because it doesn't matter. It's not going to affect your 2018 tax liability in any way, form or fashion. It's also not going to affect your 2019 tax liability next year.

[docjan7]

thanks Carl. I am going to do it later in the week and hope we can write it off in 2019. dj

[Carl]

Write off what? The only part of the mortgage payment that is deductible, is the interest and that's it. Period. (As I understand it now, even PMI is no longer deductible - but I could be wrong) So if you pay off your mortgage in Jan, you "might" have a few bucks in interest to deduct that will probably not make any difference what-so-ever in your tax liability. Well, it "might" lower your tax liability by a dollar or two....maybe.

As for me, I'd pay it off ASAP. I paid off the $48K balance on one of my rental properties a few years back when I came into the cash that enabled me to do that. Yes, I was no longer paying deductible interest after that, but I don't care. I don't have a problem with paying taxes on money *I get to keep*. But I do have a problem with paying a lender thousands of dollars a year in non-deductible principle that I "do" have to pay taxes on.  If I don't have to do it, then why on earth would I want to give my money to someone else "after" paying taxes on it, when I'm not able to deduct it?

I've got three rentals, and I'm in the process on using the "additional" income from the paid off rental that I now get to keep, to pay off another rental as fast as I possibly can.

[DaveT315]

Depends what you are paying off.  If primary residence, then pay off the mortgage if you have no intention of selling and moving in the next five years. The mortgage on your primary residence is a liability on an asset that does not generate any income for you.  Pay off the mortgage and then redirect the principal and interest portion of your monthly house payment into an income producing asset.

If a rental property, then let's talk about it.  If the property is generating a positive cash flow, then your tenants are paying your mortgage loan plus you get to take a rental expense for the mortgage interest.  I mignt be more inclined to keep this mortgage in place and use my extra cash to purchase another investment property.