Women
Age: 58
About to purchase a home for $350,000. She is currently renting
Cash on hand: $370,000
Net Monthly take Home from her job is $2,600
Monthly expenses not including a mortgage payment after purchasing home will total $2,400
Women projected to be working for only an additional 2-3 years
More then likely (95% chance) women will recieve a minimum of $600,000 of non taxable cash in the next 2 years. (Settlment from a civil case)
I was thinking the women should not take out a mortgage. The women will have $20,000 left over after the sale, ok maybe $15,000 after moving expenses and G-d knows what else. However, she can draw on that for the next 3 years to supplment her income and have a larger buffer per month. Why pay interest on a mortgage when you dont need it? Sure its tax deduct. but that doesnt mean that its interest free loan. In term of taking out a mortgage and reinvesting the money to beat out the mortgage, she would need a volitile portfolio to do that and considering her age I am not sure how wise that is. If she needs more money during the 3 years she can always get a fixed Heloc. The settlment will have come through within those three years, of which I agree is not enough for retirment but thats a problem for later on. Thoughts??