Not completely true.
Say you have $3000 a month in bills, of which $1550 is a mortgage, with a balance of $150,000.
You have savings of exactly $150,000 and pay off the mortgage. Your savings are now zero.
The very next week, you lose your job.
You have ZERO income to pay the $1550 a month in bills that remain and no savings to dip in to, either.
In the other scenario, you’d have lost your job, but have $150k to fall back on to pay $3000/mo in bills until you find a job.
That’s the thought behind such advise.
1450 a month.
So get a 20k line of credit with the house as collateral while you look for a job.
Even in the worst case scenario, you are saving 1550 a month in mortgage payments while you try to find another job.
It just makes dollars and sense no matter how you slice it. If you can pay cash up front, you’ll likely be able to barter a discount with the seller. That means cash in your pocket today that you would have available to tide you over in the event of job loss.