Hakuna_Matata:
emacknight:
b) Your payments won’t change. It doesn’t matter how much I put into my mortgage, I still pay the same monthly rate. It would mean I’d pay it off sooner, but in terms of putting $20k into a $100k mortgage, I won’t see that benefit for 25 years (or there abouts).
I think the one exception I can think of for this is if you have a substantial amount to put down, then you can re-amortize your loan. At least that is my understanding on it and what I plan on doing with the equity in my current home. I just purchased a new home and am in the process of selling my old home. **Once it is sold I have to place those funds somewhere so that I don’t pay captial gains taxes, **and I plan on rolling them into the equity in my new home. According to my banker I can then re-amortize the loan (reducing my monthly payment). I plan on doing this and then continue to pay the old mortgage payment–thus reducing a 15 year note into an 8 year note. For me an 8 year window is acceptable whereas a 30 year window would not be. But I haven’t looked into that too far as I am not sure how long it will take me to sell my old house and it has only been on the market for a week anyways! You looking to buy a house by any chance?
That’s not how it works now (used to work that way, but it’s been a while). Now there’s just an exclusion (I think the amouint is $250k for single people and twice that for married filing jointly). Gain under that amount isn’t taxable whether or not you re-invest, and gain over that amount is taxable even if you re-invest.