Mortgage Rates.......

[Jeff Lebowski]

.... an NFT, 2.25 Bitcoins, speculative crypto, kids rehab, ....

[Northwestcoug]

If your house was truly paid for and value was 6-700k and you didn’t withdraw 500k at 2.5% you made a bad financial decision.

Maybe a 22-2400 monthly payment for access to that much liquidity is a no brainer. Also a hedge against future rate increases which everyone knew was about to happen.

Just a quick example:

You can buy a GE 10 year GO at almost 7%. You roll 400k into that and your mortgage is being covered by a GO bond from one of Americas most important companies with 100k to improve your home, go on a vacation, down payment on a rental property, down payment on second home, an NFT, 2.25 Bitcoins, speculative crypto, kids rehab, 50k into an index fund, etc etc etc.

You sound a lot like my advisor. Instead of the Hinkley-esque 'cut your credit cards up and pay off debt ASAP' that I grew up with, most of his recommendations usually entail some kind of debt. It usually comes across as counterintuitive, but he ends up persuading us.

During COVID our cash accumulated and we had nowhere to go, so we wondered if we should pay off med school and car loans with it. He recommended to deposit the cash in an investment bank account, and then they would give us a good rate on a home refinance loan, and then whatever cash we got back on the home 'worth' we could do what we want with it. So we paid off all our loans, used some of the cash to build our outdoor kitchen, and now have a separate interest-bearing fund. Which is right now.....in the red. Oh well, 2 out of 3 ain't bad.

[BigFatMeanie]

Regarding using one's home as financial leverage to : improve one's home, go on a vacation, down payment on a rental property (really? who wants to be in the property management business - yuck), down payment on a second home, blah blah blah:


As Ten Bears told Josey Wales, "all those things you say we will have, we already have".