No. of Recommendations: 0
My question is after I pay off that 18,500, would it make sense to write a convience check to the mortgage company every year from my credit card to take advantage of a low interest or 0% interest loan to pay down the principle balance? Once a house is paid off, I would use the rental income to continue snowballing until all homes were paid off. With increasing rent, this would give me an income of around $7,000+ a month that I would have free and clear. Any thoughts?

If you are able to manage the cash flow with the fixed rate payment and the credit card, it sounds reasonable. The deductibility of the interest payment on the credit card would be based on if the debt was traceable to your rental real estate, so you would need to show clearly that the debt was solely incurred to pay down the mortgage and be sure not to use the credit card for anything else.

If you use this strategy for your primary residence mortgage, you would lose the deductibility of the interest altogether, but by dropping the interest rate significantly, you will still come out ahead, assuming that the BT costs are reasonable.

Print the post  


UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.