There is no free lunch. If you buy a used but relatively young designer home, you are probably looking at $1600/year bond payment. If the bond was paid off, the house should sell for more money because the new buyers would have $1600/year less expenses. The higher price would result in a larger mortgage but it should be a wash. I suspect most people can't do the math and the real estate agents can't explain it. Too bad ...
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Originally Posted by retiredguy123
I hate debt, but, in my opinion, you should not pay off the bond unless you plan to keep the house for a long time. Houses with a bond may be more attractive to a buyer because the buyer has the option to assume the bond or to pay it off. However, if you pay off the bond, you remove the buyer's option because the bond cannot be reinstated once it is paid off.
Of course, a house with a paid off bond is more attractive than one with a bond if the price is the same. But, if you pay off the bond, you need to raise the price to get your money back.
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