That strategy may not be as sound as it may have been for your parents. A recent CNBC.com article explored this issue in an article titled “Don't treat your home like a cash cow
The thought was that a person could purchase a home that was a bit over their price range, but they would see their salary "grow into" the mortgage payments. The home would be an investment that would pay off handsomely 40 years down the road when they were ready to sell.
However, based on the recent market history and outlook for mortgage rates versus the potential in the stock market, mutual funds, and annuities, a person today is much better off buying a more modest home and putting those excess funds into a strong growth fund for a much better return.
If you have questions about how to structure your income to see the greatest return for your retirement, get your financial advisor and your estate planning attorney together. You’ll have a great time.
For more information visit my Wichita KS Estate Planning Attorney website
Reference: CNBC.com, February, 22, 2014: “Don't treat your home like a cash cow”