Quote:
Originally Posted by JourneyOfLife
I am not an expert on the TV bond. But, the correct answer is... it depends! Some of the considerations are unique to the person(s) and their situation.
Generalizations, though they may have some truth to them, may be too simplistic.
There could be simple financial reasons to do it... that fall under the heading of "you are very confident it will cost you less money"... crunched the numbers and are sure you intend to stay.
I also can think of a number of other absolutely valid reasons why I might choose to pay the debt up front instead of payments with interest in the future for other reasons.
One might be a situation where it is my primary home and I have the money today, but might be "less able" or strained to meet my obligation of debt in payments in the future. Possibly because some future unexpected crisis might occurred later that could turn into a personal financial crisis.
I won't elaborate further.
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In addition, contrary to some earlier posts, it is not at all certain that you will not recover the bond payoff when you sell your house. In fact, I think most buyers (but not all, I agree, and I can't prove this) are smart enough to figure in the amount of the bond when making a choice between two houses-- one bonded and the other not. However, it is absolutely certain that if you don't pay off your bond, you are paying interest at a much higher rate than you would if you took out a larger mortgage on the house and paid off the bond.