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Originally Posted by Randall55
Not if your mortgage rate is 2.5% and investments earn over 5%. I think this may be one reason people are not buying at the moment. Who can blame them?
I know several people who are waiting to buy homes near Eastport. They want to be closer to the championship golf courses and the square. They realize those homes will be a better investment than the surrounding preowned homes.
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It’s hard for certain ages to see the bigger picture, of one can make more money by investing, and use OPM mortgages money.
My parents are that age bracket, use all your cash so you don’t have a mortgage. Problem is money doesn’t grow, until house is sold. Usually upon death, so one is sitting on debt free house, with no tax write off, and unless they take out a equity loan (which is 12.5%) money is stagnant.
Our financial guy for the last 6 houses, always has us take large mortgage, 30-60 days pay down 30- 50% or more, especially when rates are above 4%. All the while our investments are making us money, more that the interest debt.
So no matter what interest rate is, your monthly interest is reduced by half and then some. Re-amortization of payments for $175.