Mortgage loan and move money to US
Let me restate question for clarity. Facts: Question: Are there any taxes for this transaction? Answer: (Added improvements provided by Eric) Generally No. Generally, it is not considered income until you sell and the sale price is greater than the purchase price. But with currency differences, there is an additional complication, section 988 rules apply. It could result in ordinary income or loss.
"This is a very complicated thing to try to do. There are many variables, and some will come down to personal taste and buying habits. First you need to look at each of the loans and find out two very important things.  Some times you pay a huge penalty for paying off a loan early. Usually this is on larger loans (like your mortgage) but it's not on heard of in car loans. If there is a penalty for early re-payment, then just pay off on the schedule, or at least take that penalty into consideration. Another dirty trick that some banks do is force you to pay ""the interest first"" when making a early payment.  Essentially this is a penalty that ensures you pay the ""full price"" of the loan and not a lessor amount because you borrowed for less time. The way it really works is complicated, but it's not usually to your benefit to pay these off early either. These usually show up on smaller loans, but better look for it anyway.  Next up on the list you need to look at your long term goals and buying habits. When are you going to re-model your kitchen. You can get another loan on the equity of the house, it's much harder to get a loan on the equity of a car (even once the car is paid off). So, depending on your goals you may do better to pay extra into your mortgage, then paying off your other loans early.  Also consider your credit score. A big part of it is amount of money remaining on credit lines/total credit lines. Paying of a loan will reduce your credit score (short term). It will also give you the ability to take out another loan (long term).   Finally, consider simplification of debtors. If something goes wrong it's much easier to work with a single debtor, then three separate debtors. This could mean moving your car loans into your mortgage, even if it's at a higher interest rate, should the need arise. Should you need to do that you will need the equity in your home.  Bonus Points: As others have stated, there are tax breaks for people with mortgages in some circumstances. You should consider those as well. Car loans usually require a different level of insurance. Make sure to count that as well. Taking these points into consideration, I would suggest, paying off the 2.54% car loan first, then putting the extra $419.61 into your mortgage to build up more equity, and leaving the 0% loan to run it's full course. You all ready ""paid for"" that loan, so might as well use it. Side note: If you can find a savings account or other investment platform with a decent enough interest rate, you would be better served putting the $419.61 there. A decent rate ROTH-IRA would work very nicely for this, as you would get tax deferment on that as well. Sadly it may be hard to find an account with a high enough interest rate to make it a more attractive option the paying off the mortgage early." "Somehow I just stumbled onto this thread...  &gt; You essentially robbed the person holding the debt (since you promised to pay it off).   Depends on leverage, with fractional reserve lending.  Banks are permitted to loan out 30x their actual assets, or more.  If I have $1 but can loan out $30, and anything more than $1 gets paid back, I haven't lost any money.  In addition, I can write off the amount defaulted, *and the government will pay me back* for certain types of loans.  With student loans, since they are almost impossible to discharge, gov't will pursue the borrower for years and decades, and ultimately collect more interest.  Here is an article on it:  http://online.wsj.com/article/SB10001424052748704723104576061953842079760.html  &gt; According to Kantrowitz, the government stands to earn $2,010.44 more in interest from a $10,000 loan that defaulted than if it had been paid in full over a 20-year term, and $6,522.00 more than if it had been paid back in 10 years. Alan Collinge, founder of borrowers' rights advocacy Student Loan Justice, said the high recovery rates provide a ""perverted incentive"" for the government to allow loans to go into default. Kantrowitz estimates the recovery rate would need to fall to below 50% in order for default prevention efforts to become more lucrative than defaults themselves.   Not to mention:  http://studentloanjustice.org/defaults-making-money.html  &gt; So essentially, the Department is given a choice:  Either do nothing and get nothing, or outlay cash with the knowledge that this outlay will realize a 22 percent return, ultimately (minus the governments cost of money and collection costs).  From this perspective, it is clear that based solely on financial motivations, and without specific detailed knowledge of the loan (i.e. borrower characteristics, etc.), the chooser would clearly favor the default scenario,  for not only the  return, but perhaps the potential savings in subsidy payment as well,     And don't forget the penalties accruing to the person defaulting; they will probably have to move out of the country in order to escape collection.  And let's factor in the huge ROI the lender sees by creating an indentured servant class.  Plus, the gov't will issue as much currency as it wants, to make *itself* whole.  And how much of a loss IS the loss, when the whole of the loan amount went right back into the local economy, paying professors, janitors, landlords, grocery stores, etc.?  And don't forget all THOSE taxes (income and sale) that the gov't collects.  Government will collect ~30%-50% of the loan immediately as income and sales tax, plus a portion of it every time the money changes hands (I pay income tax, then use some of my after-tax money to pay you for a product or service, and you still have to pay tax on that money, and so on).  So it's more complicated than having ""robbed the person holding the debt"".  Banks at 30x leverage don't lose money as long as they get back 1/30th of the total amount lent out, including interest, fees, and penalties, before considering write-offs and government repayment.  In fact, the point of over-leverage is so you CAN make loans that have risk attached.  If you could only lend what you actually had, you would have to stay away from anything risky because it would be too easy to lose money.  Having virtual $ to bet means you can serve market segments that have higher risk.  This makes MORE money for the banks, that's why they do it.  They are already playing with funny money, so they don't lose any even if you default and move to another country.  And the money you ""spent"" has also made its way back to them in various amounts, such as your professor's mortgage payments, auto loan, etc.  Your taking on debt already helped the bank get its OTHER loans repaid.  So, roughly speaking, if you took out $90,000 and $3,000 of that made its way back to the bank through various means, they haven't lost any money, because it only cost them $3,000 actual dollars in the first place." Danger. The affidavit is a legal document. Understand the risk of getting caught. If you are planning on using the condo to generate income the chances that you default on the loan are higher than an owner occupied property. That is why they demand more down payment (20%+) and charge a higher rate.  The document isn't about making sure you spend 183+ nights a year in the property, it is making sure that it isn't a business, and you aren't letting a 3rd party live in the property.  If you within the first year tell the mortgage company to send the bill to a new address, or you change how the property is insured, they will suspect that it is now a rental property.  What can they do? Undo the loan; ask for penalty fee; limit your ability to get a mortgage in the future; or a percentage of the profits How likely is it? The exact penalty will be in the packet of documents you receive. It will depend on which government agency is involved in the loan, and the lenders plan to sell it on the secondary market.  It can also depend on the program involved in the sale of the property. HUD and sister agencies lock out investors  during the initial selling period, They don't want somebody to represent themselves as homeowner, but is actually an investor. Note: some local governments are interested not just in non-investors but in properties being occupied. Therefore they may offer tax discounts to residents living in their homes. Then they will be looking at the number of nights that you occupy the house in a year. If they detect that you aren't really a resident living in the house, that has tax penalties. Suggestion: If you don't want to wait a year buy the condo and let the loan officer know what your plan is. You will have to meet the down payment and interest rate requirements for an investment property. Your question implies that you will have enough money to pay the required 20% down payment. Then when you are ready buy the bigger house and move in. If you try and buy the condo with a non-investment loan you will have to wait a year. If you try and pay cash now, and then get a home equity loan later you will have to admit it is a rental. And still have to meet the investor requirements. You mention only two debts, mortgage and student loan, but you mention $19K in savings, which suggests that you are a saver, and likely do not have other debts. You did not mention your (net) income and expenses (income statement), but since you have substantial savings, you likely live within your means (income > expenses).  Since you mention $38K in retirement, we might conclude you are regularly saving for retirement (are you saving 10% toward retirement)? You did not mention any medical condition or other debts, that might require a large savings, so I would suggest having 6 months savings ($2.5K x 6 = $15K) but should your net expenses be less, you might reduce this ($2K x 6 = $12K). You do not mention any investment you might want to make, but since you did not mention any candidate investments, we can assume you have no (specific) investments you find particularly attractive.  You did not mention anything you were saving to purchase that you might want to purchase. You have combined $19K + $50K = $69K savings, and $15K would be a comfortable emergency savings, leaving $54K you could use to reduce mortgage or student loan debt. The mortgage debt interest @4.5%, is higher, so paying that debt off would be like earning 4.5% guaranteed return on your money, tax-free.  At your income, your marginal tax rate is low enough that the mortgage interest deduction (if you do itemize) would not reduce this return much (15% if you itemize). The student loan debt interest @2.8%, would be like earning 2.8% guaranteed return on your money, tax-free. Clearly the higher return on your 'investment' in paying off debt would be reducing your mortgage balance (over 50% higher return on investment, compared to the student loan debt). You did not mention any circumstance that might cause the student loan rate to increase, the mortgage rate to increase, nor did you mention any difficulty making both the mortgage and student loan payments, the amounts of either payment, nor the number of years remaining to pay on either. Should you need (or desire) to reduce your payments, you could choose to payoff the student loan to eliminate one payment, and thus decrease your expenses.  Or you could choose to pay down the mortgage, and refinance (or refactor) the mortgage to obtain a smaller payment.  Another strategy (assuming you have had your house for 5-7 years), might be to pay the mortgage down enough to refinance into a 15 year loan, and (assuming you have a good credit score) obtain a lower (3%) rate. But I am going to suggest you consider a blended approach.  Combine the Dave Ramsey Debt Snowball approach with the reduce the interest rate approach.  Take the $54K ($57K?) available (after reserving 6 months emergency fund), and split between both.  You pay your mortgage down by $27K and your student loan debt down by $27K.  Your blended return on investment is (2.8+4.5)/2 = 3.65%, and you have the following Balance Sheet: Assets: Debts: The next steps would be to, There are two great reasons for paying off the student loan debt. One is the Dave Ramsey Debt Snowball approach which is that this is the smaller debt, and thus represents a psychological win, and the other is that student loan debt has special treatment even in bankruptcy. In addition to TransferWise that @miernik answered with and that I successfully used, I found CurrencyFair which looks to be along similar lines and also supports US$. There is no best way, you can send the money to India or invest into shares in US. It depends on the risk you are ready to take. A non-cash transaction will not be a problem. The bank will have to fill out federal paperwork if there are large amounts of cash involved.  This is to stop the underground economy.  This can even extend to non-banks. If you were to walk into a car dealer or some other stores and hand them a bag  of cash they will also report it. You can do what you propose without having to transfer any money between accounts. Your girlfriend can put the furniture and landscaping on her credit card, or write checks to the stores or companies. Based on the number of questions on this site regarding how to transfer funds between banks and accounts, the mechanics of the transfer is the hard part. Resist the urge to use cash to make the transfer. That will require paperwork. Many people find that the old standard of using checks to transfer funds is easy, safe and quick. The US requires its (tax) residents to report foreign accounts if the balances (on all the accounts together) are $10K or more at any given day during the year. This is done through the FBAR system. In addition, you obviously need to report this income on your US tax return and pay taxes. If the balances on your foreign accounts exceed specific threshold, your tax return should also include form 8938. If you report everything and pay the taxes due - you can keep the money wherever you want and transfer it between your accounts as you may see fit. If you don't - the US government may come after you with huge penalties, and the Dubai bank may freeze your account. Its easy to become US tax resident. Stay in the US for more than half a year in a row - and here you are. Subject to the US taxation. Even if you're not a US citizen or green card holder, or at all illegal. Some immigration statuses may grant you an exemption, but none that allows you working for your Dubai employer, so I'm assuming you're a US tax resident.