Of course it's your decision. To play devil's advocate, if your house were paid off, would you borrow against it to have cash in the bank?
yes i would and everyone here should. a mortgage is a giant inflation hedge. having a mortgage in FIRE is a giant safety net vs not having one.
This exchange
in another thread prodded me to think about something that's been in the back of my mind for a while... A lot of folks around here would never pay off a low interest mortgage early, and many people cite the more promising returns in the market as a reason to maximize leverage with cheap loans, so... is it a good idea to do a cash out refinance, given that the real estate market around me is going bananas right now, and the value of my home on paper has skyrocketed?
I currently owe ~$103K on a 30 year fixed at 3.5%.
Based on recent sales of identical houses in the neighborhood, I think the house would easily appraise between $190,000 and $200,000. Assuming a 75% loan-to-value, I could potentially refinance and get ~$38-46K of equity out of the house in cash. It looks like I could also secure the same rate I have now.
I don't have any particular job picked out for the extra money, but I could invest it, either by buying another property, or buying funds.
Has anyone done something similar? Besides paying fees to refinance, what are downsides to a move like this?