there are definitely pro's and cons . the problem with most american's is they suck at investing . morningstar's investor returns vs the funds returns show poor investor behavior is a major problem .
we get blinded by that fact when we are in financial forums where folks make investing a hobby or interest .
so most American' s even if they had the discipline to actually invest the money they did not tie up in the house , which is another problem , they still may not actually beat the risk free return of the mortgage even though they should have .
while they certainly could have done better leaving the house as is and investing elsewhere , left to their own devices many will fail at it . so the paid off house can be a 2nd place prize for them .
i actually sold our homes , rented and invested elsewhere and we did very well . in fact we could not have done the deals we did if the money was still tied up in the house .
today those investments can buy multiple homes like we had even after subtracting out 15 years of rent .
but today we are interested again in buying a co-op to live in next year . i am no longer the aggressive investor i was , i don't have to be and cutting costs down the road as well as cutting dependency on markets is my focus .
remember , if you are retired and drawing down from your portfolio , any increase in expenses like having a mortgage vs not , increases sequence risk . so unlike when you are not spending down you just need to invest and beat an average return , now you have the added factor of not only beating that average return but it has to be in the right sequence of gains and losses .
so now you have two parameters that have to go right , not just one .
for us , the catch 22 is that by delaying social security , even though we have multiple 7 figures in investments the banks we tried said it is a toss up as to whether we will be approved because they sell the mortgages and the guidelines about the constitution of the income stream is very strict .
so we may have to end up paying cash . if we do we cut 6k a year in expenses compared to our renting now . but conservatively we will give up 12k income on the money we will use . so a side from the much nicer living situation in the co-op with all the amenity's we are hoping that the rents will eventually eclipse the co-op maintenance and the appreciation will put us ahead .
in either case our draw will still hold below 4% with or without a mortgage .
we still own investment co-ops and as an example back in 1987 we rented it out for 850 a month and maintenance was 475 .
well today it gets 1800 a month to rent and maintenance is only 600 . so there is a big savings there .
my ex wife is living there now and for only 600 a month she has an 1800 dollar a month apartment .
so we are hoping our housing costs will escalate less over time owning instead of renting .
if we can get the mortgage i rather do it that way .
when it comes to this stuff everyone's own unique situation will be very different .