[jmg]

Originally Posted by 04mazdaspeed

But you don't have to be. That's all a personal decision. I'm 28 and my wifes 22. We just paid off our house this year and own 4 cars outwright not including the vette I bought. It CAN be done. I choose to do it this way for my family incase anything ever happened to me, her and the kids wouldn't have to worry about a thing. Its all in how you look at it. Plus if either one of us ever lost our jobs, we wouldn't have to struggle. Hence why I like the security of not oweing anyone.

I think that's great for you if that's what you want to do. For me, I would not want to have paid so much out of pocket on something that appreciates at the same rate regardless of how much money I have put into it at only a 4-6% interest (jumbo). In other words, the benefits of a mortgage are that all the appreciation belongs to you despite how much of that balance you have paid off.

Here's an extremely simplified scenario: you mortgage house A and pay it off in 5 years. You spend $400k out of pocket to pay off the mortgage. At the end of 5 years the house is worth $550k. You profit $150k.

Alternatively, you could have mortgages 2 homes instead, paying only balance due. Assuming a $2.2k payment that's $132k x 2 for two homes = $264,000 total out of pocket in mortgage payments. But at the end of 5 years you have $150k x 2 = $300k in appreciation. Compared to the first scenario you have made almost twice as much with a little over half the investment. In the real world you would ha e to calculate what was lost in interest payment from the mortgage balances and property tax in all scenarios, so it's actually not quite twice the profit, but you get the idea. In actuality, you could have gotten 3 homes instead of 2 but the risk is too high at that point.