Pay off mortgage or rent

[Jake Zimmerman]

My wife and I purchased a single family 3BR 2 bath home for 75,000 in the Midwest at 4.75%. We can pay it off in 2 yrs or rent out @850month. Why not pay it off?  I get that we have more dumped in but to pay it off in that short of a time and increase the cash flow seems like a win/win.

[Joe Villeneuve]

Originally posted by @Account Closed:

I'm old school.  To me, if I'm paying interest, then I'm losing money.  And equity is money in the bank.  If you ever need it, you can get an equity line of credit.

1 - You are not the one paying the interest...your tenant is.

2 - Equity isn't money in the bank.  Cash is.  Cash is free to use.  Equity costs you to use (interest on HELOC needed to access it)

3 - You have to get approved for a HELOC, it costs you fees and interest every time you use it, and you won't get 100% of your equity out to begin with.