How much interest would a tax payer/home owner have to pay in interest in order for them to choose itemized deduction because of their mortgage interest in a year?

Think about that. You are suggesting to other adults to do something that isn’t mathematically possible…

Please stop drinking. You’re embarrassing yourself.

Just a promotion at the job I have been with for 8+ years. I am a General Manager at a restaurant making 68k base.

I'm not sure if all banks look for this, but mine wanted to see that I was working in the same field for at least 2 years prior to purchasing. Just food for thought since you said you just got a higher paying job.

Jesus Christ. Stop. If you’re personal loan is 26% now please do not take out another one right now unless they offer the consolidation loan at like 7%. You’d be better off opening a new credit card with 0% XX months balance transfer promo.

I have perfect credit and no debt and I can’t buy a house right now. Realistically you’re probably 5 years out from getting to a point that makes sense. Pay the personal loan off. Pay the credit card off, and then pay the car off. After that start saving for a down payment. Over time your credit score will increase just from having the credit card open. You don’t have to use it.

Reevaluate purchasing after you a 5-10% down payment.

Wait. I want to make sure I understand. Your investment account is earning more than 26%?

Refinancing high interest debt into a lower interest rate personal loan should save you some money. I would worry less about the potential impact to your credit scores, and instead just focus on paying off your high interest debt and then saving up cash.

> when we go to purchase our first home (hopefully) next year.

Your timeline for buying may not be realistic if you have no savings at all right now. Make sure you are saving up enough cash for your down payment, an additional 3-4% for closing costs, and then a 3-6 month emergency fund on top of that. If you are aiming to buy a $200k home with a 5% down payment, just as an example, you'll need something like $26k in cash before buying.

I provided you that number further up this chain. I told you the mortgage amount that would be needed for both a single and a married person to hit the itemization threshold with just interest. I have provided every number you have asked for already as well as a link to an amortization calculator. If you believe they are wrong give me the correct number.

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Is your investment account earning more than the interest rate on your debt? If not, you should liquidate and pay off your debt. You’re losing money otherwise

The burden of proof lies in your hands.

That’s literally how this works.

You don’t arrest someone and then the prosecutor says, “well fine, you prove to me who the real murderer is then”

You don’t “average out” the interest in amortizing.

Taxes are done yearly. After year 1, how would it be mathematically possible that he would be able to use itemized deduction?

It’s simple algebra. There is an exact amount of interest a homeowner would have to pay in order for that threshold to be broken.

How is it even possible to eclipse that number? Just for paying interest?

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Stop moving the goal post, tell me what is wrong with my numbers. Once you have done that I will explain amortization to you. Also the link I provided provides a complete amortization table including a break down of each payment for the full 30 years.

I'll wait for you to provide "correct" numbers.

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Never get a personal load to pay off credit cards. You will more than likely rack the credit cards back up and have a personal loan. Just pay off what you have now and save money.

That isn’t at all how amortization works.

The borrower pays interest-heavy at the beginning and principal heavy at the end.

There is an inverse relationship between these 2 where every consecutive payment, you pay less interest than the previous.

So again, explain how OP would be able to use the itemized deduction? How would it mathematically break the standard deduction threshold?

I’ll wait

Got it.

Can you list out the debts along with interest rates, from highest interest to lowest interest?

The numbers I gave you were from an online amortization calculator, I used the one at bankrate.

Here is how I came up with $1.12 for every $1 financed over 30 years at 5.85%:

Put in $100,000 for home price, $0 for down payment, 30 year for loan term, and 5.85% for interest rate. That gives you a loan amount of $100,000, total interest paid of $112,959, and total cost of loan of $212,959. Move the decimal over 5 places to get the cost per dollar of $1.12959 in interest per $1.00 initially financed. I guess I could have rounded to $1.13 instead of truncating to $1.12 to be slightly more accurate?

If you believe they are correct feel free to provide what you believe to be the correct numbers. I have provided actual numbers and my source and showed all my work. You're going to need to do more than just say I'm wrong.

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Oh that’s right.. so I’m wondering if he’s making a mistake by holding a traditional IRA instead of Roth IRA

>So $7.5k/year in Roth IRA until retirement?

>And max out the Traditional IRA simultaneously too?

No, for those over 50 the limit for IRAs is $7500 total across all your IRAs. Doesn't matter if that is 1 IRA or multiple, traditional or Roth.

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Why continue to use credit cards with the evidence so clearly indicating that you struggle to manage your debt?

For most, the biggest barrier to home ownership is the down payment. How are you going to save for a down payment if it is going to take you +6 months to pay off $7k?

What are the interest rates on your debts? How much extra per month could you throw at this debt?

With a credit score of 655 you're not likely to get a good rate on any loan. Your best strategy is the aggressively pay off the credit card debt and personal loan ASAP. Your auto loan depends on the interest rate. That will do way more for your credit than taking out even more loans.

Nope, try again.

There are actual amortization mortgage calculators that show you every single payment.

I’m just waiting for you to have actual numbers to prove your point. This will be lovely.