Posted on: 13th Nov, 2009 06:16 am
Parents have a condo; $90k balance on mortgage, bought for $225K, probably worth $180K now. Dad was recently laid off; collects Social Security. Mom will collect Social Security soon. Monthly cashflow for them is tight. Looking for smart way to help out to give them some flexibility with their fixed income.
I would like their mortgage to disappear.
Could I
a) pay off their mortgage (but then where does the mortgage interest tax benefit go?)
b) make their mortgage payments for them (at least then they'll have the mortgage interest tax benefit)
c) pay off their mortgage, assume title to the house, and claim it as an investment property that essentially loses money? - i.e. depreciate it at cost basis - to shelter my income?
I would like their mortgage to disappear.
Could I
a) pay off their mortgage (but then where does the mortgage interest tax benefit go?)
b) make their mortgage payments for them (at least then they'll have the mortgage interest tax benefit)
c) pay off their mortgage, assume title to the house, and claim it as an investment property that essentially loses money? - i.e. depreciate it at cost basis - to shelter my income?
How about a reverse mortgage? They have to be over 62, equity wise they look in good position. Mortgage payment goes away and you save your money.
On your points. I am a strong proponent of paying the mortgage off, whatever tax credit one may get pales in comparison to the cash in hand one gets to keep because they have no mortgage. Cash in my book trumps "credit". Ideas b & c work but there again if reverse may be an option then try that first. Let me know if you have further questions.
On your points. I am a strong proponent of paying the mortgage off, whatever tax credit one may get pales in comparison to the cash in hand one gets to keep because they have no mortgage. Cash in my book trumps "credit". Ideas b & c work but there again if reverse may be an option then try that first. Let me know if you have further questions.
i am agreeing with sonja about paying off the mortgage and who cares about the interest writeoff. i'm a lot more skeptical about reverse mortgages than i used to be, so i think i'd stick with your original suggestions, favoring the payoff thought.
