Current home valued at $350,000 and is free and clear. We will sell this home and buy a retirement home in North Florida.The home we want to buy is $500,000. Should we take part of our 401k stash of 2.4 million and pay it in full OR have a mortgage for $150,000?
2007-04-24 15:00:17 · 7 answers · asked by kbemje2000 1 in Business & Finance ➔ Renting & Real Estate
If this is your retirement home and you will be there for awhile, just buy it cash if you can. That's the difference, is that you can. Why pay unnecessary interest? Especially if you have access to that much money. Own it free and clear, no more headaches with that bill, and you still have plenty of money to live on comfortably. You could put the rest in a high interest CD and live off of THAT interest!
2007-04-24 16:17:20 · answer #1 · answered by CJ 3 · 0⤊ 0⤋
Number 1 rule in your retirement. To be debt free. Anyone telling you otherwise you will notice has no money in the bank. You can buy a house for cash and have a real estate lawyer handle everything. Just like a bank does. Tax deductions? You know better. They don't amount to anything. Give me $10,000 a year, and I will gladly give you back only $1,500. Any day of any year. Sleep well at night in your golden years without a mortgage and without worrying about what the heck the STOCK MARKET is going to do. Also, when you are older you do not need life insurance. You should have money in retirement funds to cover expenses. (including your house). Start reading some books. You are getting info from people that LOVE debt.
2016-04-01 05:53:26 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Is your 401k stash taxable when you take monies out? You have so many options; take the mortgage and take the tax exemptions on the interest. However, you might want to look at self directed 401Ks or IRAs. These vehicles alllow you to invest your monies in various areas, i.e., real estate (all variations), gold (bullion, coins, stocks), private loans, etc. Once your investment realizes a profit or is paid off, the earnings and the profit go back into the account, tax free! This is WAY BETTER than the standard IRA or 401K method of saving!
2007-04-24 15:30:33 · answer #3 · answered by RC 1 · 0⤊ 0⤋
This is a personal decision. Most real estate professionals will tell you that you're better off paying as low a down payment and as low payments as possible. This allows you to leverage the fewest dollars into the most gain. But your objective isn't strictly gain on the property. And, depending on your risk profile, you'll be happier with more in the property so you have lower or no payments. You need to discuss this with a financial advisor so you understand the implications, but you need to realize that the right answer isn't always how you make the most money for the smallest investment. Sometimes the right answer is what feels good to you.
2007-04-24 15:22:18 · answer #4 · answered by Still reading 6 · 0⤊ 0⤋
Cash.
You're retired. If you got sued for I don't know what and lost your investments, how would you pay that mortgage? Remember the home is exempt in most states as your Homestead, no one can touch it except a mortgage lender.
Safety says pay cash for it.
2007-04-24 15:38:27 · answer #5 · answered by open4one 7 · 0⤊ 0⤋
Pay in full because the cash won't get you the interest you'll have to pay on mortgage.
2007-04-24 15:03:59 · answer #6 · answered by SGElite 7 · 1⤊ 0⤋
It depends on your age and what tax bracket you're in. If you are younger (50's or less) then leave your 401k alone.
2007-04-24 15:07:29 · answer #7 · answered by Anonymous · 0⤊ 0⤋