Quote:
Originally Posted by photon
Both!
Many lenders offer a product that converts from a mortgage to a line of credit as you pay it down, so you pay $100 to your mortgage, borrow it back and invest it. With the added advantage of the interest on that $100 being tax deductible. So you don't actually pay off your mortgage, you just convert it to a LoC for investments.
|
But all things being equal, I would suggest using extra money to get rid of the mortgage debt which is not tax deductible first. I understand the Smith maneuver thing, but the mortgage part is never tax deductible, it just decreases as the "secured" line of credit increases, which is the part you can write off.
So if you can pay down your 5 year mortgage in 3 years, I would say pay it off rather than pay it for 5 years and use your extra money to invest.