Keep all the equity in the house?
My husband and I have just finished building our home. It is paid for, but ended up costing far more than expected at the start. We aren't real comfortable having this much of our capital tied up in the house, but can hardly see taking out a mortgage at our ages (50 & 60). Otoh, if we are going to take out a mortgage, it is my understanding that to do so in the next 90 days would allow us to treat it as "original mortgage debt", with all of the interest deductible.
I know that many investment advisers say to not have a lot of money tied up in your home, so that any appreciation comes to a smaller original investment, giving you a higher rate of return. BUT, we don't plan to sell this house, and don't live in a part of the country where property values increase astronomically in a few years. We do itemize, so the interest would be fully deductible. I'm not real confident that we could invest the money and earn a higher return than we would be paying - certainly not before taxes. And then there's the matter of monthly payments. Making payments on a mortgage would require working more than we really want to in coming years.
I know that I haven't given you enough details for you to give advice here. What I would like is suggestions of things to factor into this decision.