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Housing Debt

September 16th, 2010
house, giving, money  [html]

When talking about housing last time, I wrote:

we would be postponing giving (as much / any) money away until the house was paid off. This is because we want to minimize interest paid, so we should pay it off as quickly as possible.

I've since been convinced that this may not be a good idea, for two reasons. The first is that when we talked to oxfam they told us that they prefer a constant rate of donation to large sums either now or in then future. This is because they have substantial legal and social pressure to be spending money about as fast as they get it and not hold on to it unless it's specifically given to be held on to (as an endowment). So this suggests the best thing for charity is for us to pay a mortgage payment and give away money at the same time.

The second reason is that with the way mortgage debt works in US law, it may be that having a mortgage makes sense for other reasons. I would need to read more about this closer to the time.

As for postponing giving, we're currently saving up a down payment, which we think will take about 2 years, though we may go back to giving before then. Any money we don't give away now will have to have the (as yet unacertained) charity discount rate applied to it when we do give it away later.

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