Mathematically, I agree with ScubaHogg. Similarly, there is no difference between what is proposed, and putting only 10-20% down for a house, mortgaging the remainder, when one has adequate assets in taxable to buy the home in full (let’s assume negligible CG taxes, such as a recent windfall or step up in basis). Lots of people do that.Really?My brother in law did this around the market low in 2009. It would have worked out great for him, but unfortunately he got a rare cancer a couple years later and passed quickly
As side note, there is no difference between taking out a mortgage to invest (which everyone freaks out about) vs investing while you have a mortgage (which is the rule, not the exception)
People take out a mortgage to buy a home. They don't invest the amount of the mortgage, because they don't have it, it went to the sellers.
During their ownership, they may accumulate enough to pay off the mortgage, but many don't. Often they evaluate the return on the market vs their mortgage rate, but many just keep paying the mortgage.
We paid off our mortgage in 2022 when the adjustable rate was set to rise, and we evaluated it vs the return on our bond returns and no more tax deduction due to using the standard deduction.
If you already own a home and have paid off the mortgage, taking out a mortgage to invest in the market is putting your home at risk. Really bad idea.
Statistics: Posted by snowday2022 — Sun Nov 03, 2024 7:11 am — Replies 18 — Views 1022