Pay Off The Mortgage?

I am moving from Southern California to Western New York (now you know where I got my screen name) I am in a situation where I can pay off my new house with some money left over.

Do I pay the house off? I will be in the 40K tax bracket.
or
Do I put 20% down and invest the rest?

I already plan to take some of my left over money to buy some rentals, but I want to get in slowly, not start with 50 units.

If it matters, new house will cost $189K I will have about $240K.

Thanks.

Comments(3)

  • SmileyFace1st March, 2005

    How old are you? If you are 60 years old, you should definately pay off your mortgage of your primary. If you are going to be working and making money, you need some tax deduction. If I were you, I would keep the money to invest (not only in REI, you can use other instruments such as stocks, bonds, CP, note, and so on) instead of paying off the morgage. [ Edited by SmileyFace on Date 03/01/2005 ]

  • dontaskwhy1st March, 2005

    I am 30.

    What about paying it off and using an HELOC to purchase other investments that are sure to return more than the interest I am being charged? Also, if I pay it off, I can use money that I would have spent on house payments to invest in other retirement/college accounts.

  • InActive_Account9th March, 2005

    use a HELOC?? why? It is a higher intrest rate and normally some form of ARM.

    I would put down 20% on your new home. This does two things.

    1) best interest rate
    2) no PMI

    Put the remaining amout in some savings account. (you never know what you will need to buy after you get into a new house - so be prepared, thier is always a cost assiciated with every move.)

    Then I would start looking for investment props.

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