Quote:
Originally Posted by laceylady
Keeping It Real is speaking as a 'frog'--he plans to stay in that particular huse until he croaks. In that case it makes sense to pay off the bond or refinance it to a lesser interest rate.
I usually don't stay in one home very long. So for us, paying off the bond doesn't make sense. If we are still here in seven years (my usual time for a house) and planning to stay, we will pay off or re-fi the bond.
|
Don't remember telling anyone what I was speaking as so I am not sure how anyone would know that information, but I assure you I am not speaking as a frog .
If you stay in your house 10-12 years you will have paid out enough $$ to have paid off the entire bond up front. You would save the remaining 18-20 yearly payments.
Even if you stay 7 years you will have paid out over 60% of what if would have taken to pay off the bond initially and you will still owe 91% of the original bond or 23 more yearly payments which you must try to pass on to the next buyer
Since you haven't saved anything and have paid the same $$ out towards the bond now, your 7-8 year old house will have a hugh bond still to be paid while the other home will be a bond paid home. Now which house do we think will sell faster? Both owners paid out almost the same $$ for the bond even if you only stay 7-8 years.
This will be even more of an issue with the new homes right now having a so much larger bond initially than homes did a few years ago. When new homes today are 7-8 years old if paid anually their bond balance amounts will still be 91% of the original bond amount which will be a big factor for homes that old.. close to $18,000.00
Do the math.....then do whatever is right for you, no two people are the same and everyone wants to think they made the right decision. Don't forget to add the annual fee you also pay each year of over $107.00 which doesn't go to the bond or interest.
http://www.districtgov.org/departmen...Unit%20175.pdf