Home Down Payment vs Roth IRA

I recently opened two Roth IRAs (one for me, one for my wife) at Fidelity. Although I will roll a good deal into mine (from a 401k with a previous employer), according to a Fidelity agent, both funds are still considered at ground zero as far as contributions are concerned. This means we are able to put $4,000 in each account still this year (i.e., before January 1, 2008) without penalty.

The complicating factor is we also are buying a house on which we will likely close at the end of January 2008. We have enough money saved to make a handy down payment on the house, but I wonder if I shouldn’t use some of it to max out the Roth IRAs this year. Although I previously stated Roth IRAs are the first priority, that was comparing retirement options. How does the #1 retirement choice compare to other, non-retirement financial dealings – like paying off a house?

The $8,000 difference in down payment will have an effect on the monthly mortgage payment, but that isn’t of concern as we plan to pay extra, anyway. The catch for me is less money down means paying more interest over the life of the loan, resulting in a few more months of payments before mortgage-payment-freedom.

Then again, less money into the Roth IRA means less interest earned over the life of the fund – and that life will probably last significantly longer than my mortgage payments no matter what the down payment is. Given this, I’m leaning heavily towards maxing out the Roth IRAs this year. Is there anything I’m missing?