Mortgage costs more than tax savings

A reader recently asked you about the value of having a mortgage so she could deduct the interest. I was disappointed that you didn’t point out the folly of paying a bank $4 just to avoid paying the government $1. (Obviously, the benefit would be slightly higher for someone in a higher tax bracket, but it never makes sense to have a mortgage for the sole purpose of the tax write-off.) — L. R.

You’re right, and I missed a chance to point that out. I have said that here many times over the years though.

Borrowers get confused because mortgage lenders say that you aren’t really paying all that much because you get to deduct the interest and that saves on your income tax. It does, of course, but it still costs a lot more than it saves.

Mortgage borrowing is a fine resource, but it’s not a tax-avoidance technique.

Minimum Repairs?

I am a senior citizen who might want to sell my home in a couple of years. I have an in-ground swimming pool. The sidewalk around it has developed some serious cracking, and the fence and shrubbery surrounding it all need an upgrade. I realize that not all buyers are interested in pools. Should I do a minimum amount of repairs, or improve it to impress?

We have a four-bedroom home in a well-regarded school district, so I expect that the next buyers would have children. Other areas in the home need upgrading — things like wallpaper removal. Our home is 45 years old. The pool is 44 years old. —

When one real estate broker asks another, “So, what’s the condition of that house?” and the other answers, “Well, the homeowner is elderly, so, you know…” that’s agent shorthand for a house that could probably use upgrades and doll-ups the owner doesn’t want to fuss with.

As for that pool, in some places it’s pretty much expected and repairs might be in order. In other areas, it might take a long time to find buyers willing to tackle a pool, and you might even be advised to fill it in.

I’ll bet regular readers of this column know what I’m going to suggest: Seek free advice from experienced local real estate agents. Find phone numbers on different firms’ nearby lawn signs. Call and ask someone to come over. You can be upfront about not being ready to sell yet. You’ll get valuable free advice from agents who know buyer expectations in your area.

Timeshare Advice

Well, I should have known that just printing the word “timeshare” would hit a nerve. Lots of owners have things to say. I assume those who have good experiences with timeshares don’t bother to write in. This reader, though, had one basic piece of advice.

My experience with timeshares is you are told that you can get a gift if you agree to listen to a 90-minute timeshare sales pitch. You meet with a sales rep who shows you around the property and takes you into the model (which is usually larger than what you will actually purchase). He says, “If you want to go to our sister property in Aruba, just let us know.” But read the contract. If you want to stay in Aruba, you’ll have to find someone with whom to trade timeshares. And, there has to be a vacancy in Aruba. You might try for years to get there.

They make reselling your timeshare sound easy. As we know, it is not. They also tell you that you can bank your weeks. That is true, but you can only bank so many. Again, read that contract before you sign.

Remember that these salespeople are paid generous commissions to sell these timeshares, and you will never see them again. Read the contract. If you don’t understand something, don’t sign.

Another pitfall is that the property can fall into disrepair. The property we looked at needed work. Maintenance fees could arise. Read the contract.

On the other hand, we know people who love their timeshares. They arrive and leave at the same time year after year. It depends on the individuals, their schedule, the property and the written contract.

Beware of high-pressure salespeople who offer you very little time to read the contract and say things that sound too good to be true. If they are reputable, they will offer you time to ponder and allow you to return the next day. Then, the salesperson will still get the commission, and you will have made an informed decision. That’s what we did. — I. D. S.

Congratulations on your timeshare purchase.

Contact Edith Lank at, at or at 240 Hemingway Drive, Rochester NY 14620.

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