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I don't see how taxes factor in. You don't get 100% of your money spent on interest back, you at most get 39% back. Having a mortgage to write the interest off doesn't make sense. Having a mortgage to afford a house does.

7% before tax mortgage rate is pretty low. Sinking more money into the house to pay the mortgage off would be nice but it is like putting all your eggs into one basket. All your worth would be in one asset (the house). Using the money to invest in stocks probably makes sense from a possible return standpoint and as a financial diversification.

You can get more opinions on the Buying and Maintaing a Home message board in the Managing Your Finances folder. Just hit Messages on the home page or Folders below :)

Patrick
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