(Closed) Smith Manoeuvre

posted 5 years ago in Home
Post # 5
Member
526 posts
Busy bee

@ greeneidlady- I think it’s a mortgage strategy but I’m not sure! 

Post # 6
Member
330 posts
Helper bee
  • Wedding: September 2011

@greenidlady:  

@ms.melli:  

A quick Google search confirms that it’s a mortgage strategy for Canadians. So…doesn’t apply to us in the US.

Post # 7
Member
2082 posts
Buzzing bee
  • Wedding: March 2013

@Mrs.Camera:  Ahh, okay, I was too lazy to look it up, lol. Thank you clarifying.

Post # 9
Member
330 posts
Helper bee
  • Wedding: September 2011

@AB Bride: Yeah. And since in the US our mortgage interest is already tax deductable, it doesn’t apply.

It sounds like a neat idea, but I’d probably talk to a financial advisor and get some details before making a decision. Good luck!

Post # 11
Member
342 posts
Helper bee
  • Wedding: January 2013

We’ve done this.  We worked with a financial advisor to make sure everything was set up properly so we’re not worried at all.

Essentially my DH had to sell all of his investments before we purchased our home.  We then set up 2 different accounts against our home – a small amortizing mortgage and a line of credit.  When we closed on the house we drew on the mortgage and the balance was paid with the cash.  A few days after the closing my DH then reinvested by withdrawing against the secured line of credit.  That way we can easily show the cash withdrawal against the LOC supports the investment purchases making the interest on that loan eligible for a tax deduction since it was used to generate investment income.

I hope this helps.

Post # 13
Member
342 posts
Helper bee
  • Wedding: January 2013

@AB Bride:  We’re happy with the financial arrangement.  DH works in finance and loves to invest so we figure we would’ve just reduced our downpayment if we didn’t go this route since he loves trading stocks.  We ‘re definitely “ahead” because we get the deduction for the interest on the LOC which we wouldn’t have received otherwise.  We got really good rates on both products so that definitely wasn’t a concern for us.

 

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