I have a question for the landlords or those who have used a villages home as a rental. It involves the Bond.
I have just sold a large amount of stock at a nice profit. I am going to use it to do one of 2 things - pay down the mortgage or pay off the bond.
It have a 30 year mortgage that it is my intention to pay off over 5 years (part me and part the renters, I am on track to do this). I can't retire for 8-10 years (I know, it stinks). So this is rental property until I retire.
Also, let me say we will NOT sell this house and buy another, we love the location and it is the perfect place for us. So that is not a consideration.
The mortgage is at 4.18% and the Bond is at 5.128%.
I know the interest on the bond is not considered deductible for HOME OWNERS WHO LIVE IN THEIR HOME. However, it is deductible as an expense against rental income. In fact, I think the whole Bond payment should be deductible as an expense. This would mean I should probably pay down the mortgage because I can use the Bond Payment to offset rental income, whereas I can only use the mortgage INTEREST as an expense, not the principal payoff..
Any thoughts anyone has would be appreciated. I am sure I am not the only one who has had this dilemma
