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Author: wasmick Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127777  
Subject: Re: Should I pay cash or get a mortgage? Date: 3/1/2013 4:04 PM
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Of course it does. I pay no interest. None. Zero. Someone who has a mortgage does (and for those who tell me "it's deductible" I say "Sure. You spend $1 to get 25¢ in deductions.")

For those who tell me "I get more in my stocks than the mortgage rate" I say "2007. Or 1999. Or any of a dozen other times in history when the market went in the crapper, when dividends were slashed, when bonds swooned." The is no market event which will deprive me of my house, but there may be which deprive you of your ability to "pay it off right now."

Now I would be a fool to advise someone to use their last ten pennies to pay off their mortgage, but with a reasonable cushion, what's the big deal? (Oh, and if you should find yourself in need of cash, they have these great things called "banks" which will loan you money against the value of your house. I believe the instrument is called "a mortgage."

Do I own my house free and clear? You bet. Two of them, actually. And damn proud of it. Sleep very well. Nothing like it.



Proof that there is no right answer.

Whatever works for you personally is the right answer. While it's easy enough to run models that will demonstrate that having a mortgage will likely provide better financial results over time, there's no way to put a dollar value on sleeping well at night.

Personally, I have one free and clear property, mortgages on my rental properties and a mortgage on my primary. I know for a fact that over time I get better return on my money than my mortgages cost me.

That's my personal choice. Others choose differently and they are just as correct.
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