Question for the Money Doctors
Question submitted on Aug 10, 2021.
QuestionI'm 40 yrs old. Considering a 100k cash out refi for investment purposes. I have 15 yr mortgage currently and recently offered a no cost mortgage refi @2.2/15yr or could do a 2.875/30y.
Assuming s&p500 index fund returns 10% would it make more sense to pull equity out and invest in the market or to stay the course on the mortgage?
I'm already maxing out my tax advantaged accts. I have 1.4m in investable accounts.
Risk doesnt scare me. I'm having a hard time determining which is the smarter play over the next 10 yrs with the goal to pay off the mortgage in the next 10-15 yrs.
It is generally not a good idea to borrow money to invest. You are taking risk to make an incremental return.
Also the cash-out refinance will not be deductible. Therefore you will be paying nondeductible interest.
How about adding to your investments at what the additional loan payments would be. This is better than paying nondeductible interest.
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