What was the biggest motivator for paying off your mortgage early?

[rennigade]

Nice. Of course there are tax implications to that but only if someone tells the IRS.

We werent loaned any money though. Not sure if that makes a difference. I call it an interest free loan but im not sure if thats technically the case.

[disneysteve]

Gave a large down payment and agreed to pay the rest back over 15 years at 0%.

We werent loaned any money though.

Of course you were. You were loaned whatever amount you "agreed to pay" back over 15 years. If you weren't loaned any money, there would be nothing to pay back. It would have been a gift (which also has tax implications).

"The IRS will deem any forgone interest on an interest-free loan between family members as a gift for federal tax purposes, regardless of how the loans are structured or documented. Interest will be imputed if it is interest-free or at a rate below the AFR. The interest forgone, which is the difference between the actual interest charged and the federal AFR rate, is deemed to have been transferred from the lender to the borrower as a gift subject to gift taxes, and then the borrower to the lender as interest income, which must then be recognized on the lender’s individual and state tax returns."

There are some nuances to that based on the amounts involved but generally speaking, when you make a private loan like that, you need to charge market interest rates or the difference is taxable.

[rennigade]

Of course you were. You were loaned whatever amount you "agreed to pay" back over 15 years. If you weren't loaned any money, there would be nothing to pay back. It would have been a gift (which also has tax implications).

"The IRS will deem any forgone interest on an interest-free loan between family members as a gift for federal tax purposes, regardless of how the loans are structured or documented. Interest will be imputed if it is interest-free or at a rate below the AFR. The interest forgone, which is the difference between the actual interest charged and the federal AFR rate, is deemed to have been transferred from the lender to the borrower as a gift subject to gift taxes, and then the borrower to the lender as interest income, which must then be recognized on the lender’s individual and state tax returns."

There are some nuances to that based on the amounts involved but generally speaking, when you make a private loan like that, you need to charge market interest rates or the difference is taxable.

Good to know. I had no idea. Thanks.

[LivingAlmostLarge]

Good to know. I had no idea. Thanks.

DId you have a promissary note? You set pay and set those up for when you buy proper with owner financing and usually declare that interest. I only know because I have a friend who did that with her rentals that she sold.

[rennigade]

DId you have a promissary note? You set pay and set those up for when you buy proper with owner financing and usually declare that interest. I only know because I have a friend who did that with her rentals that she sold.

Yes there was a promissory agreement. From what I remember reading it just basically said well pay x amount over a certain period. It wasn't anything too involved, with that part of it.

[Smilinggirl]

I’m a single woman in my fifties. Having no debt feels like a safety measure to me. If everything fell apart, I could always downsize and free up a few hundred thousand.

[rennigade]

I’m a single woman in my fifties. Having no debt feels like a safety measure to me. If everything fell apart, I could always downsize and free up a few hundred thousand.

Sorry to hear about your situation. Not only is it a safety net, but men and women should feel empowered to be debt free. Debt is a way to control the masses. Kudos to you.

[ua_guy]

As we get ready to pay off a mortgage again, the reason is simple. Freedom, and fewer worries, should something happen to either one of us. We've owned a home with no mortgage in the past and the feeling alone is golden.

[Smilinggirl]

Sorry to hear about your situation. Not only is it a safety net, but men and women should feel empowered to be debt free. Debt is a way to control the masses. Kudos to you.

No need to feel sorry. I’ve been married and that wasn’t so good. Being single is much better than being trapped in a relationship that isn’t supportive. I have successful grown children, but I hope to never be a burden on them. For now I like where I’m at in life. I do want to be as prepared as possible for getting older though.

[zakity]

I paid off the house in 15 years. I figured that way we could just work on saving money for retirement.