Quote:
Originally Posted by GuyWin
I just calculated the interest being charged on my CDD Debt Assessment (Bond) if we finance it over 30 years instead of paying it in full. This does not include the Maintenace Assessment that never goes away.
- Our CDD Debt (bond) in Pennecamp is $20,268.61.
- The annual amount each year for 30 years is $1,652.69.
- The annual rate to amortize $20,268.61 for 30 years @ $1,652.69 a year comes to 7.2%. Over the 30 years we will pay a total of $49,580.
- That's almost two and a half times the bond itself!
- Paying the bond in full would save us $29,312 in interest.
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Similar argument can be made for whether to take a mortgage on a home. Say you buy a $250,000 home, pay $50,000 down and mortgage $200,000 for 30 years at 4.75 percent. In 30 years, you've paid $175,586 in interest and a total of $425,586 for the house, including the down payment (but not taxes and fees).
But maybe you don't plan to live there for 30 years or maybe you can afford the payments but not a lump sum to pay cash for the house.
Most of us, in our working years, took a mortgage. In retirement years, many of us do not. Costs, individual plans and circumstances and individual values factor into each family's decision. So there is not a good one-size-fits-all answer.