Talk of The Villages Florida - View Single Post - Pay Off Bond or Pay Down Mortgage?
Thread: Pay Off Bond or Pay Down Mortgage?
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Old 04-15-2021, 09:03 AM
retiredguy123 retiredguy123 is offline
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Quote:
Originally Posted by kidnerkim View Post
Why would cash out value of your home decrease? Bond paid off is a selling point ! We are looking at homes & are NOT looking south of 44 due to the very large bonds. I have even heard of people making offers on homes & offering less than the asking because of the bond. The interest rate is higher than mortgage rates right now so I would pay off.
Assume that you own a house with a $20K bond that will sell for $300K today. You pay off the bond tomorrow. If you need to sell the house the next day and break even, you would need to sell the house for $320K. But, any real estate agent will tell you that you cannot get $320K for the house, because buyers would rather pay $300K for a similar house even if it has a $20K bond. Also, if the buyer needs a mortgage, they may not even be able to get one because it may not appraise for $320K.