[Topspinmo]

Originally Posted by CoachKandSportsguy

Market pricing -> Identical houses, one with bond one without bond, the market price will be the price the house based upon the house without the bond. ie, the bond is irrelevant to the sales price. ergo, you cannot add the price of the bond you paid off to the market price of the house, and be competitive, that's what the realtors are saying. However, that is not the correct way of looking at getting your money back from paying off the bond early.

The correct way is based upon the house price appreciation assuming a price increase of 3% a year, and the bond being 10% of the initial value of the house, the bond being paid off with the appreciation of the house is shown in the graphic attached.

So depending upon how long you want to live in your house, with your individual cash flow statements, paying off the bond is a better answer if you still have cash availability to do so now and you have no plans on moving, versus depending on investments which may or may not sustain that return in the future. With the huge price appreciation you probably already have the bond payoff returned in appreciation. So with appreciation, then you can also rationalize not paying off the bond, because you may lose capital appreciation on the source of the payoff, which is a valid point of view as well.

Either way, always remember that paying off the bond reduces fixed expenses, resulting in more free cash flow from SS and RMD in the future, as well as less risk of losing the capital returning the bond equivalent payment, through unanticipated events.

The future is always uncertain, sometimes more uncertain than at other times

finance guy

I can ask what I want, that don’t mean someone will pay. Anything used only worth as much as someone will pay. The rest is just guidelines.