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In this scenario, how does one go about paying down a mortgage or loan?

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One doesn't. there are interest only mortgages. Why would you want to pay down your mortgage. You probably have to withdraw money from your 401K and pay ordinary income taxes. With home prices rising your home equity grows without paying down your mortgage.

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Thanks for this. So, is the monthly interest paid for with the very modest by comparison salary that is earned?

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