Should I refinance or pay off my primary residence?

[Jesse Holshouser]

I have a general financial/psychology question. A bit of back ground, I have owned 3 homes and a couple of rental properties. I currently only own my primary residence. It is a 6 acre farm with a brick ranch. We have been living in an RV while we rehab the house. I paid 210k for the property and have put roughly 150k into it. When it's all said and done, based on recent similar property sales, including a neighbor with the same size house and 6 acres, I expect the property to be worth 425-450k. I owe just under 150k on the property.

My question is, do I refinance and pull my equity out to invest or do I pay the property off and enjoy the freedom and peace of mind of not having the mortgage? I understand mathematically, it probably makes more sense to refinance and invest. But psychologically, I'm drawn to paying it off, especially with my first child on the way. I could also still establish a HELOC and use that to finance rehabs if I decide to flip in the near future. Just looking for general thoughts/philosophies of other investors. Thanks!

[Steven Keung]

Jesse - congrats on being in your position! I think a lot of it has to do with the stage of life you might be in. For instance, if you are looking to retire, paying off the property and having peace of mind could be the most ideal scenario.

However, if you are looking to continue growing your RE portfolio, I think a HELOC looks to be your best bet as it gives you flexibility regarding the timing of your next acquisition/project without having to pay monthly in the interim.

Wishing you all the best!