[Bill14564]

Originally Posted by Altavia

I get people who don't like debt, but that is an emotional choice.

The bond is a debt against the property. It transfers to the next owner when selling the home.

The bond is not a personal debt, is not tax deductible, does not count against your credit score or ability to finance the home in the same way a personal debt would.

Bonds average less than about 5% the cost of a home so be careful making it a major factor in the decision in a home purchase. Don't let the tail wag the dog.

If you have the cash to pay off the bond, investing that money to pay the bond will cover the cost and probably more. You'll still have the cash if needed or when you sell the home.

Based on feedback from a number of sources, my assumption is there is only a 20% probability of recovering the present value if bond cost when reselling the home.

Especially now where it's highly unlikely the present value of a payed off bond can be recovered in the sale price of a home in the current market.

YMMV...

For everything the bond is not, what it is is a cost out of my pocket. I have to pay the full principle but it’s my choice whether I pay the interest and fees.

In my case, due to market fluctuations over the last few years, gains on that money in my account would not have covered the interest and fees. Plus, with the fixed fee the effective interest rate increases each year. No one knows what the next few years will bring but expecting more than 5%/year over time is optimistic.