Agent

Don’t keep a mortgage just for the tax deduction

Homeowners may be wasting money

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DEAR BOB: We have a home mortgage at 7.25 percent interest with a balance about $23,000. When we talked with several mortgage lenders about refinancing at a lower interest rate, they all said they don't handle such small amounts. Most said $100,000 was their minimum. One offered us $50,000 but we didn't accept. We can pay off our mortgage from savings. But we hate to lose our tax deduction. What would you do in our situation? --Vern W. DEAR VERN: Keeping a high-interest-rate mortgage just for its tax deduction slight savings doesn't make sense. If you pay $100 in mortgage interest to save $28 in income tax (if you are in a typical 28 percent tax bracket), that is a tremendous waste of your dollars. Purchase Bob Bruss reports online. However, please don't pay off your $23,000 mortgage with savings if that will leave you "property rich but cash poor." Please be sure you have adequate reserves for emergencies and investment opportunities. If you pay off that $23,000 mortgage balance, as I...