Quote:
Originally Posted by RoseyRed
Sometimes paying cash for a house will trigger large tax payments, therefore some folks perfer to have the mortgage. Not sure why they would pay down principal 30 days after purchase. Would be interested to hear the logic on that.
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Interest rate, is the reason for quick pay down. Many buy the house then sell current one after move. Bonus our banks offer little or no closing costs.
A mortgage at $400,000 with 7% interest rate can rack up $3000 a month in interest. One also has to wait until first payment has been paid to pay down principal. If you are making more money on investment, no brainer where your money should be.
Your financial guy can help with how your money works for you. In high interest rate years we take out mortgage, then pay down.
Once one of our other homes sell, we invest, pay cash for home improvements, pay down mortgage. All of our mortgages never longer than 7 years.
My parents freaked at ever having any debt, once their advisor stated making them more money than interest, they became more comfortable making money with their money. Our financial team has been very beneficial according to our tax accountant