AboutJohn D Smith, CFP Expertise I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related financial planning/investment issues. I have a B.S. degree in Financial Planning & Counseling. I am also a Certified Financial Planner (CFP) and have performed fee only investment management and financial planning services for the past 11 years.
Question Assumption: There will be double digit inflation in the next 5 years.
Q: Should I pay for my new home at time of purchase or get a 10 yr mortgage? I plan to retire @ age 62 in 1 yr.and sell my current home (mortgage paid) and buy a new home for 200-300k. I have no current debt. I make 80k gross/yr. No spouse or children. I have enough money put away to live comfortably in retirement irrespective of buying vs taking out a new mortgage.
Thanx in Advance John
Answer Hi. The answer to your question is dependent on several factors, some of which are financial and others emotional. From purely a financial perspective, all things being equal, it mostly comes down to opportunity cost and whether or not you can earn more on the $$ you would use to buy a house than the after tax cost to carry a loan. If the answer is yes, then it makese more sense to take out a loan. If the answer is no, then paying cash may make more sense. There are other factors that can influence the decision, which are difficult to discuss in a forum such as this. I hope this helps!
