MrsFlatbread
Skinny jeans are in my future
Member since 6/06 10258 total posts
Name:
Baby Momma
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Tax/Mortgage Accountants: with the following info...
what would you do?? My concern is with the tax savings primarily!!!! help!!
Is the federal and state taxe rates for NY correct?
Deciding whether or not you should refinance your home mortgage depends upon several factors. It also depends upon whether you are looking to simply reduce your monthly payment or if you are hoping to save money in the long run.
To understand better, lets look at an example. If your original 30 years loan was for $365,000.00 with a 6.250% interest, and you have already paid on it for 36 months, it will reduce your monthly payment if you refinance for a new 30 years period but with a 4.250% interest rate.
If your Federal tax rate is 26.000% and your state tax rate is 5.000%, you were probably paying $2,247.37 per month toward your home. When you refinance at the new rate, you will pay $1,728.31 instead, but your tax benefits will also be affected by this change.
The bottom line is:
you will lose $14,569.92 on tax savings (lesser tax benefit is worse)
your remaining balance will be $3,399.05 less because you will pay more toward your mortgage principal (lesser principal is better)
closing your refinancing process will cost you $1,392,236.98
Summing up these numbers, we can figure out your total refinancing LOSSES, which will be $1,359,807.15.
Message edited 9/10/2010 2:29:03 PM.
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MrsFlatbread
Skinny jeans are in my future
Member since 6/06 10258 total posts
Name:
Baby Momma
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Re: Tax/Mortgage Accountants: with the following info...
Posted by Blu-ize
I'm not understanding these formulas.
I don't understand what my tax rate has to do with what I pay for my home. I know it effects my income taxes and my deductions.
see exactly...i have no idea and trying to determine whether or not we should refinance....
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JandJ1224
Member since 6/06 5911 total posts
Name:
Jannette
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Re: Tax/Mortgage Accountants: with the following info...
I think in this example you would be paying $500 month less and then they are saving you would lose on the tax write off, so you would pay say $150 (30%) more in taxes on that difference but I would think it would still be better to save the $350 after tax difference!
Not a tax professional, just my understanding
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