Downside is you just lost a huge deduction.
@Stealth83: My deduction on a 120k home interest wise compared to a individual deduction is like a $400 difference. You still get to write off the School and County. Whats going to really get everybody this year is the sales tax write off. They would give you a automatic annual number to write off that will be going away next filing season.
Some states it is wise to have a lender on your home. If your involved in a civil lawsuit people can get your equity or your whole house together. Texas is not one of those states you can do that. Homestead laws are stronger here.Write offs go like this I spend 1 dollar in property tax, interest and file a write off  I get .50 cents back. That percentage also changes with gross income. Of course with a paid off home there is no interest so you really save a buck or few thousand bucks. 4951