Any benefit to paying off my first place?

[Mike Seluk]

I suspect this may be a self-answerable question... :oops:

I currently live in a small but nice townhouse. I want to buy something else, but I'm wondering if there would be any benefit to paying off this place before doing so. Based on what every outlook I've read seems to indicate, things will continue to decline or at least stay low for some time, and I think that there is time enough for me to pay off the place and then save up more.

I'm expecting to hear that it's best to keep cash on-hand and ready for use when a great buy comes along, so no, I shouldn't tie it all up in the first place.

But what about financing? With lenders being freaked about who they give money to now, will I be able to get a loan while carrying the first place?