That part about the interest on your mortgabe being tax deductible always makes me cringe.... It is only tax deductible IF you itemize AND you can beat the standard deduction. In our 27 years of marriage, we have always itemized and NEVER,... NOT ONCE.... EVER.... beat the standard deduction. Why? Becuase we are average, middle class income people living in a mid-sized town where housing prices are relatively cheap. It only makes sense if you have a really expensive home and make a #$@$#$ load of money. The bottom line is, for average income people, any time you give your money to someone else, it is money you will not get back.
Here's a link to a good article that I have quoted from in the past...
Keep the mortgage or pay off the house?
An excerpt from the article....
"An income tax deduction for homeownership is sacred in Americans' minds, but often the deduction doesn't add up to much. The financial advisers who tout its value probably live in expensive areas and own pricey houses, while the rest of us aren't so lucky.
Sure, mortgage interest and property taxes are tax-deductible, but the amount of interest and taxes typically paid on a median-priced home in the U.S. results in unimpressive tax benefits. If you live in the Midwest, are in the 25 percent tax bracket and you have 20 percent equity in your median-priced home, there are possibly no tax benefits at all.
Uncle Sam's standard deduction of $10,700 in 2007 for a married couple filing jointly -- available whether you own a home or not -- exceeds the value of the mortgage interest and tax deductions from the very first day of homeownership."