Use a mortgage to fund a mutual fund investment for cash reserve?

Answers:0   |   LastUpdateAt:2012-08-27 04:38:03  

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malna
Asked at 2012-08-27 04:38:03
As rates continue to fall , I'm considering: MedlinePlus My house will appraise for ~ 500,000 MedlinePlus I now owe $ 200,000 in year 5 in a stream of 30 years [email protected] % . MedlinePlus MedlinePlus I spent the last five years by paying the mortgage debt ( my only debt ) as fast as possible . Should I use my 300k to finance capital invetment plan ? MedlinePlus I'm thinking : MedlinePlus 1) Take a $ 350,000 loan for 30 years (hopefully , 5% ) MedlinePlus 2) Pay a monthly mortgage of $ 2,000 ~ MedlinePlus 3) Place the $ 150,000 to a conservative mutual fund to earn a modest 8 % interest . MedlinePlus MedlinePlus Taking into account the tax benefits of mortgage interest , the numbers look promising . I understand that mutual funds do not automatically return to 8% . Some years may lose and some years can get 16% or more . Is average. MedlinePlus MedlinePlus The numbers will create a nice cash reserve in about 5-10 years, which is comforting . MedlinePlus MedlinePlus Does this make sense . The figures suggest so, but do not know if I'm missing something . I have a separate IRA retirment MedlinePlus MedlinePlus Any suggestions ?
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