Both here and below you can improve the models by including the tax implications (at least for US taxpayers, which I presume you are). Tax effects don't affect the overall feel of the space, but they do change the details, and particularly where the break-even point is in practice.
To summarize, for most US taxpayers: * interest paid on a home mortgage is tax deductible * investment income is taxed and/or illiquid (e.g., in an IRA)
Additionally, you should consider buying equity in the home as buying insurance against other financial woes (as it can be tapped via home equity loans), and the risks involved in failing to diversify investments outside of home equity (as the recent fail in home prices demonstrates).
![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
no subject
Date: 2009-04-29 03:28 pm (UTC)Both here and below you can improve the models by including the tax implications (at least for US taxpayers, which I presume you are). Tax effects don't affect the overall feel of the space, but they do change the details, and particularly where the break-even point is in practice.
To summarize, for most US taxpayers:
* interest paid on a home mortgage is tax deductible
* investment income is taxed and/or illiquid (e.g., in an IRA)
Additionally, you should consider buying equity in the home as buying insurance against other financial woes (as it can be tapped via home equity loans), and the risks involved in failing to diversify investments outside of home equity (as the recent fail in home prices demonstrates).