No. of Recommendations: 0
From the point of view of sleep at night, many people prefer to have their house paid off so there isn't the drain on cash flow, particularly in retirement.
From the point of view of hard numbers, over a long period, the Foolish thing is take out as big a mortgage for as long as you can; make payments as small as possible, keep the money in investments and not in the house. If real estate increases in value, it will do so just as much if you only own 20%.
One aspect of this is that once you have qualified for a mortgage, it gives you a chance at liquidity. If you need money for medical expenses or an emergency and the money is tied up in the house, it is very difficult to get at it. Sure, you can get a home equity loan, but that would be at a higher rate.
I'd also add, don't pay points. The interest rates
now are higher than a couple of years back and the long-term in rates is probably lower, which suggests you might be wanting to refinance in a couple of years. If this is the case, points (effectively interest paid up front) reduce the desirability of the refinancing.
Best wishes, Chris
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.