Quote:
Originally Posted by Rsenholzi
The houses are beautiful down there but watch out for the bond prices. It adds an additional $25,000 in cost on top of the house, that they conveniently “forget” to tell you. They roll it into the cost of the mortgage so you are not only paying the cost of the interest on the bond but also the cost of the interest on the mortgage bring the interest to almost 10%
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I'm no math wiz. We recently paid off our bond. At the time we bought, eight years ago,
the amount of the bond was far less than it is now and the interest rate was 5%.
When, we paid it off we were told the rate would be renegotiated in two years. That was roughly a year ago. Due to current interest rates going down, I assumed. perhaps incorrectly that it would go down from the 5% we were paying. I've seen people posting it is now 7%-that is not confirmed by me.
Check what you are saying. While you send one check for the bond with your mortgage they are not additive 7% interest on the bond plus 3% on the mortgage. It is paying two loans with one check. One loan is 7% the other 3%. Even the terms are different.
You can decide to pay more into your mortgage and pay off a 30 year mortgage in whatever you choose say 15 years 10 or 28 years. By law there is no penalty. The bond on the other hand you do not have that option. You need to pay it off in full.