Quote:
Originally Posted by KeepingItReal
On the other hand, if we paid it off and don't stay in the house long term we will lose even more money.
Think this is one of those myths that most likely isn't true and would be different on every sale. First thing most buyers look for on pre-owned homes is the remaining bond balance. If you stay more than a year or two you'll loose all the interest you have paid for sure and the new buyer will still owe almost the entire bond amount which will be an even heavier cloud over a home sale as the home gets older especially when compared to those with the bond paid. Even after paying yearly payments for 12 years and then if you do sell the home, the bond balance will still be $17,343.96 of the $21,510.17 original bond amount for Unit 175 homes. This remaining bond balance on a 12 year old home will cause you to have to lower your price to cover the bond liability compared to homes with the bond paid. Forgot to mention in those 12 years you would have paid out more $$ in yearly payments than the entire original bond.
Not trying to convince anyone to do anything one way or the other, guess the yearly $107.91 administrative fee on top of a nearly 7% interest rate was what convinced me. Bond interest is paid forward which means you are paying future interest on the bonds that hasn't been paid out and it is not tax deductible.
Everyone needs to follow their own best plan on this and do what's best best for their situation. Good luck..
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Well thought out post. That was our reasoning in paying off our bond. Bad enough to pay a $20,00 bond or whatever they are charging nowadays, but to end up paying 2 or 3 times the original bond amount is not a nice feeling. We also figured that if we do decide to sell for some reason, having the bond paid would be an inducement for potential buyers.