To mortgage or not to mortgage?

[fireorbust]

We signed a contract to buy a home about 50 miles from our current home. We also are working through a contract for the sale of our current home. Neither is a done deal. The the new home is about 50K more than our current home. 300K vs 350K.

We have approx 900K in after tax investments (basis 850K). We have another 1400K in IRas and such. We under-spend our max possible by about 30%. Our AA is conservative. We own our current home (no mortgage).

So, I started down the path of applying for a mortgage on the new home (we will close on the new home 5 months before we close on the sale of our existing (long story, don't ask)). I was hoping to just have a bridge loan between the two closings so I could keep my cash account untouched. The bank asked all the usual questions about income. We have an 830 credit score. It seemed like I had to apologize for being retired and only having dividend "income" of 10K month across our accounts.

Having said all of that, I have made the decision to just pay cash for the new house. I won't get screwed for loan closing cost and interest for what may be a 6 month (hopefully less) mortgage. So the question is: What would you do?

 

[ERD50]

I hear you can get ~3%~3.5% on a 30 year fixed. I'd go for it.

Keep your money working for you, these are historically low rates. Over a 20 year period, equities have historically outpaced 3% almost every period. Over a 30 year period, they've more than doubled that rate every single period.

I'd refinance, but my mortgage is adjustable, so I'll just watch it flow back down (and it's pretty small anyhow).

-ERD50

 

[dm]

I’m closing on my new house in a month. I’m getting a 3.125% loan, I can’t see rates staying this low for the next 30 years. Of coarse I’ll probably be dead in 30 years.

I can’t see much downside at these levels.

 

[COcheesehead]

Now is the time to borrow.

 

[The Cosmic Avenger]

Same; I'm thinking that if we move after we retire, I'll invest the equity in our current (paid off) house and take out a mortgage on the new place....unless interest rates are sky-high by then. But if I were doing it now, it would be an easy choice for me. Even over 15 years, I feel confident that, barring an unprecedented global disaster, investments would far outpace the mortgage interest.