Author Topic: Mortgage payment vs cash back and cash flow  (Read 1153 times)

Bearded Man

  • Handlebar Stache
  • *****
  • Posts: 1142
Mortgage payment vs cash back and cash flow
« on: July 22, 2015, 10:14:31 AM »
I have one property that is currently a rental (though was a primary residence at one time) with a mortgage payment of $1,050 a month including PMI, taxes and insurance.

Once PMI expires my payment will be $950 a month factoring in some expense increases in taxes and insurance in the 2.5 years until PMI expires.

Anyways, $250 a month goes toward principal currently, and I get about $190 a month worth of money back for deductions on taxes and interest when I file my taxes. Not counting depreciation in this scenario because I want to consider this as if I was still living in it.

Essentially, $440 a month is going to my asset column once the PMI expires, and only $510 in actual expense.

Yet in this scenario, even though my actual expense is about half of the mortgage payment, once cannot really factor expenses this way for income needs since you still have to have income to make the full payment, at least the first year.

Or is there a way I'm not considering? I mean, I suppose you could technically increase your withdrawal rate to cover the mortgage payment and still be OK since the extra expense is going to your asset column.

forummm

  • Walrus Stache
  • *******
  • Posts: 7396
  • Senior Mustachian
Re: Mortgage payment vs cash back and cash flow
« Reply #1 on: July 22, 2015, 10:56:55 AM »
I'm not understanding what question you are asking. Maybe you could rephrase?

CashFlowDiaries

  • Stubble
  • **
  • Posts: 178
  • Location: Indianapolis, IN
  • Follow me on my journey to Financial Freedom!
    • Cash Flow Diaries
Re: Mortgage payment vs cash back and cash flow
« Reply #2 on: July 23, 2015, 10:19:39 AM »
I agree with MMM here, are you trying to figure out if its a good idea to keep this rental?  How much rent do you collect? 

Pooperman

  • Magnum Stache
  • ******
  • Posts: 2973
  • Age: 29
  • Location: North Carolina
Re: Mortgage payment vs cash back and cash flow
« Reply #3 on: July 27, 2015, 06:08:29 AM »
A very rough idea: 1/2 of your rent should be > mortgage payment (P&I).