First return after buying house- How much did you get back ?

[Anonymous]

Anonymous wrote:Yes rates are low now so you won't earn much in interest, per se, but why in the world would you loan your money to the govt. for free when you can engage in tax planning and keep it for yourself?

That $1k example that I could have given the govt. at no return to me would have earned 8-12% if invested in my portfolio last yr.

YMMV but I prefer to do it that way...

remember too that if points are financed they must be amortized over the life of the loan, so very little deduction per year vs. a cash payment of points...

This is true only for a refinance, not for a acquisition.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes rates are low now so you won't earn much in interest, per se, but why in the world would you loan your money to the govt. for free when you can engage in tax planning and keep it for yourself?

That $1k example that I could have given the govt. at no return to me would have earned 8-12% if invested in my portfolio last yr.

YMMV but I prefer to do it that way...

remember too that if points are financed they must be amortized over the life of the loan, so very little deduction per year vs. a cash payment of points...

I think that's an apples and oranges comparison. Getting a refund is a perfectly sensible thing to do if the alternative to it was keeping the money in your checking account, or your online internet savings account, or some other short-term, safe investment vehicle. In fact, getting a refund is now the only way to get a paper i-bond and an i-bond is a great investment if you are looking for safe, liquid investments.

If instead your plan is to put every spare nickel into the stock market then I agree getting a refund will involve a short delay in investing those dollars which may marginally reduce (or increase) your return (although anything other than an ACH transfer to a mutual fund would pretty much eat up the money in transaction costs).

Getting a tax refund is NEVER a "sensible" thing to do. It's idiotic.

[Anonymous]

I got $0.07 in interest on my checking account in July. So the extra $20 I might have gotten in my paycheck from under-withholding wouldn't have earned anything sitting in my account, and I probably would have spent the $20 without noticing. Whereas the $1,000 refund would be deposited directly into savings and I wouldn't miss the extra few cents of interest it would have earned in my stupid checking account.

I'm not saying getting a refund is "sensible." But for some people, a $1,000 check will have more impact than $20/week would. I did adjust my withholdings when I bought a more expensive house, based on redoing my taxes with the new amounts, and I got pretty close. But I like the idea of a small refund better than writing a check. For me, it's psychological.