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One thing that I didn't see mentioned is whether or not you have sufficient guaranteed source of income to pay the mortgage for the next 12 years. I consider Social Security and pension income to be guaranteed sources.

I always assume that nobody would even be considering this unless they were pretty sure that they could make the monthly payments.
You can't insist on "guaranteed" though. Nothing is guaranteed. For example, people take out mortgages based on their paycheck being large enough, even though they could lose their job (and paycheck) at any time. You just need to be pretty sure.

I figure that if someone is thinking about taking $100,000 cash and paying off the mortgage, that they have much more than $100K at hand.

I might be too conservative and would prefer not to rely solely on my investments to provide the needed income.

A point that was brought home to me at a Finance/Investing dinner seminar we attended sometime around 2001. I spoke to the FA presenter after the talk, and he said that a large number of people that came to him had quit their well-paying jobs based on the huge investment returns they were getting in the dot-com boom. They thought those returns were going to continue, so they quit their day job. Came the bust, and there were a lot of 40-50 year old professionals trying to get another similar high-paying job back.
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