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Old 08-10-2008, 11:28 AM
3,627 posts, read 12,428,411 times
Reputation: 2682


Please do a reality check for me

My father can afford to buy a house cash in SC [near us] cash outright

He does not want to sell his Florida home right now because of the market but it is an asset capable of generating capital or income [rental] as it is paid off [was paid off 20 years ago]

He is concerned about the loss of income from his cash assets

I am arguing that unless his investments are earning more than his interest on the mortgage payment on a 10% or 20% loan he will come out ahead paying outright for the house [also figure PMI on <20%]

I have run numbers on a spreadsheet taking into account mortgage tax dedecution vs income tax on income from assets.

I realize that historically over the LONG term, investments have outpaced real estate but for a short term less than 10 years I don't think it is so, particularly right now with the volatility of the stock market and low returns on bonds and CDs.

Am I missing something?
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