From This: TO This:
I have a client who is downsizing. The first question that comes in financing the new home. Should she pay for it outright, freeing herself from monthly payments or put a small amount down and invest the rest of the money from the house.
It sounds attractive to pay off her home. But as I told her she should run the number. If she puts 20% down and invests the other in a balanced portfolio of stocks & bonds, how much would she save over the life of the loan. Then compare that to no payments, and tax implications. I indicated that there are on line calculators that you can run the numbers.As I advised here before she make a commitment to pay cash or borrow, run the proposal by an estate lawyer to make sure it complements her overall plan and doesn't create problems for her heirs