Tax benefit unlikely for making interest payments on mortgage By SCOTT BURNS

Q: I've been wondering about paying off debt.

I'll be 59 old age old in August. I do $100,000-plus today, but who cognizes about tomorrow?

Over the last three years, I have got been making my mortgage payments plus further principal.

Doing that, I have got saved nearly 17 old age of involvement payments at 6 percent. Today the balance is down to less than $30,000.

Should Iodine go on this? The lone ground not to, I think, is the $3,400 involvement write-off astatine the end of the year.

In the adjacent twelvemonth or two, I see myself dropping my income down to $20,000 or $30,000 a year. That would be a semiretirement.

Should Iodine go on to do the $1,200-plus mortgage payments?

Or should I just do the monthly payment and go on to take the involvement write-off?

C.S., by e-mail

A: Wage off the mortgage ASAP. Then begin putting the other money into your retirement portfolio.

While you may have got $3,400 of involvement to subtract each twelvemonth — asset the existent estate taxation taxation deduction — the tax deductions probably aren't doing much to cut down your income tax bill.

Remember, itemized taxation deductions must transcend the criterion tax deduction before they convey any decrease in your income tax bill.

So they have got to transcend $5,450 for 2008 if you are single or $10,900 if you are married.

If you are married and unrecorded in a no-income-tax state like Texas, likelihood are there is no taxation benefit for making involvement payments on a mortgage.

Furthermore, when you travel into semiretirement, you'll happen yourself in a low taxation bracket with no taxation benefit for a 5 percentage or 6 percentage mortgage rate.

Meanwhile, your nest egg may only be earning 3 percentage or 4 percent.

Bottom line: This is a very good clip to be whacking down any debt you have.

Q: I am 72. My hubby is 79. I am dismayed by the last three calendar months in our brokerage firm accounts, particularly after such as a good calendar month in October.

We each have got an individual retirement business relationship account.

Mine is deserving about $149,000, and his is deserving about $225,000. We also have got a joint business relationship worth about $242,000. All three business relationships are invested in common funds.

Should we see purchasing an rente (variable or fixed)? If so, can we take some money from both individual retirement account pots and go forth the joint pot for any near-term emergencies? We owe $38,000 on our comfy little place in a retirement/resort-style community.

We have got a revocable life trust and no recognition card debt. P.R., Seattle

A: Your inherent aptitudes are very good. I don't cognize anyone who have enjoyed examining their business relationship statements for November, December or January. So it's important that you believe more than about how your money is invested than whom it is invested with. That's why I believe your thought of buying an rente — a fixed rente — May be a really good manner to cut down the ups and down feathers of your assets.

A variable rente won't work out the job of marketplace ups and downs. Remember, a variable rente is only a legal negligee for common finances that endows them with taxation deferral. The assets inside the negligee will still travel up and down, just as your common finances do.

But at ages 72 and 79, you can increase your income materially by using some of your money to purchase life annuities. You can scope out the possible range of payments by visiting a Web land site like . While the life rente intends you have got exchanged your principal for a lifespan income, it also intends you'll worry less about the markets. Better still, by increasing your current income through the life annuities, you'll have got less demand for income from your common monetary fund assets.

Another very good measure you should take is to pay off your $38,000 place mortgage. The yearly payments are probably quite high as a per centum of the amount owed, so paying it off would be another measure toward reducing your hard cash necessitates and exposure to marketplace swings.

Questions about personal finance may be sent to: Scott BURNS, P.O. Box 655237, Dallas, Texas 75265; e-mail can be sent to . Burns' Web page is . Universal Joint Press Syndicate

Right Mortgage Rates - Gaining a Better Understanding

Mortgage and remortgage rates may change from one loan programme to another. But is the last rates actually the best standard when shopping for a mortgage?

Shop around first to happen the mortgage that is compatible with your fiscal fortune and count the disbursals you're likely to incur from the first twenty-four hours of your loan application to its closing.

Getting a Mortgage

Looking for the right mortgage or remortgage rates can be confusing and this is compounded with the undertaking of waiting out the paperwork. Respective procedures are involved from start to finish. The procedures and disbursals differ and mortgage blessing will be dependent on the determinations made by the loaning company.

Credit companies have got respective loan programmes tailor-fitted for different needs. But there is 100s of bewildering mortgage programs. Going over a nimiety of information can be confusing for anybody who is not well-versed in the semantics. This is no thanks to the 100s of mortgage companies out there. But for each program, you must be alert to the deductions of the mortgage and remortgage rates being offered in your case.

You will have got got to give the followers information to a prospective lender: are you a place mover, a first clip buyer, are you buying a house to lease it out, or make you have the council right to buy. You will be asked to give the value of your place and the amount you desire for a loan. Your recognition history will scrutinized after you have got got indicated whether you have a good, fair, or mediocre recognition history. All these information will predetermine your pre-approval for the loan and the corresponding appropriate involvement rate.

Fixed Mortgage volts Flexible Mortgage

In your pursuit for the best mortgage or indeed remortgage rates, see your present fiscal capacity. If you're employed, it is advisable to acquire a fixed mortgage or a loan with a fixed involvement rate.

The advantages of flexible mortgages are the options you can use to pay off your loan. In this arrangement, you can cut down your monthly payment for sometime or do overpayments if you ever acquire bonuses or payouts. You can even take a reprieve of 6 calendar months from paying your monthly dues. You can also retreat equity from your place using your check book. In this case, there are pre-agreed limits to the amount you can access.

The right mortgage charge per unit can depend on the amount added to the principal, which you can afford on a monthly basis. The shorter the loan term, the less mortgage and remortgage rates but the monthly measures will be higher; the longer the term, the higher the mortgage and remortgage rates but the monthly measures will be lowered.

Subprime: Big talk, little help

NEW York (CNNMoney.com) -- The loud-hailer message from the authorities to mortgage loaners have been: Bend. Bash what you can to assist struggling homeowners.

The message to troubled householders have been: Call your lender. You may be able to work something out. Home Affordability

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