Well done! Just pay cash and be done with it, way better not having a payment and if the economy tanks and furloughs happen, pretty nice owning your home.

We own the house we are in now, my plan was to pay off the new one when this one sold anyway, just don't want to be sitting on two houses with very little margin until the new job is settled in. We are maxing out retirement already and have money going to kids school too. I'm actually hoping to be cash heavy when the economy dips again and gobble up some rent properties.

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Yes.

Pay cash.

The interest on a mortgage is insidious.

Most people just look at the monthly payment, but over the course of a mortgage, you pay for a house at least twice.

I like the idea of putting the money you would have spent into retirement accounts also.

Pay yourself in terms of tax advantaged savings and let it grow. And no matter what-don’t touch it until you actually retire.

Additionally, make extra principle payments every month if your mortgage doesn’t have a pre payment penalty clause. That'll save you tens of thousands over a 30 year mortgage period.

mortgage 3.2%
investments 15-18%

Here it goes...lol

There are valid arguments on both sides of this debate, it really comes down to ORM. Our risk acceptance level is much lower, the only reason we are considering a mortgage on this house is to get wife and kids moved and expecting our current place may sit for as long as a year on the market. Once it sells we will pay off the other house. We *could* pay cash now for this one too but that leaves us with very little margin, $400k+ tied up in houses and most likely two months until I start indoc. No room for hiccups. We are willing to eat the $3k and some interest until we pay it off to avoid being that close to the line on our available cash. We aren't willing to play the market gap long term. Just not for us.

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I’d also be VERY selective right now.

Many markets are way overheated.

The real estate market will likely collapse (or at least aggressively correct) over the next couple of years. Don’t want to be 100 k upside down on something you can’t sell if life happens.

No matter how you choose to work things, definitely have enough of a down payment to avoid PMI (private mortgage insurance.) That is “insurance” which covers only the bank and which you pay 100% yet benefit from in no way. It’s throwing money in a pile and burning it.

PMI should be illegal. It’s like paying a royalty to the guy who stole your TV-just to watch him stick it in his car.

Definitely-Most Definitely do get title insurance. It is ultra cheap-and will save your ass if someone makes a clerical error somewhere along the title trail.

Save? No. It will cost you. But peace of mind has a price, too.

Additional principle payments reduce your total interest over the life span of the loan.

I think his point was you're losing out on the opportunity to invest that money and the trade off for interest savings is lower in the long run. Like I said before this has been a debate forever. We are Dave Ramsey types (I even teach classes!) so we tend toward the lower risk end of the spectrum but there are arguments on either side.

There's a pretty good podcast, ChooseFI, that does some good dialog on both sides of this argument as well (Episode 35). One place I'm opening my aperture a bit is on holding all our efund in cash and instead considering putting some of it in low risk investments (Episode 66/66R).

Another episode that really tackles the question of a paid off mortgage is Ep 68. Specifically in the Dave Ramsey lens. For us I think our plan will always be to have our primary residence paid off and stay away from a lifestyle revolving around debt. Seems weird given that my initial question here is about a mortgage, but like I said our plan is to have that for less than a year and to keep enough capital around we could pay it off immediately if we needed to start reducing exposure.

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