[Bigben007]

Can you payoff your mortgage and not the bond? Are they tied together? Thanks

[eweissenbach]

Originally Posted by Bigben007

Can you payoff your mortgage and not the bond? Are they tied together? Thanks

Totally independent of one another.

[EdFNJ]

Originally Posted by Bigben007

Can you payoff your mortgage and not the bond? Are they tied together? Thanks

Edit: Ooops, sorry, didn't notice the first reply.
Yes you can, no they aren't. You can have a mortgage with no bond and you can have a bond with no mortgage and you can have both or neither.

[Bigben007]

Thanks for the replies

[thetruth]

Originally Posted by Bigben007

Can you payoff your mortgage and not the bond? Are they tied together? Thanks

Before you pay off the bond or your mortgage; assuming your have both, you, want to check the interest rate.

If. I recall the interest rate on our bond is 5.5% our mortgage is 3.2%. On the bond, the general OPINION is when you sell you do not recover that money in the price of the house.

Everyone's answer as to what makes sense FOR YOU, will be different depending on TAXES and investment money returns.

[dewilson58]

Originally Posted by thetruth

Before you pay off the bond or your mortgage; assuming your have both, you, want to check the interest rate.

If. I recall the interest rate on our bond is 5.5% our mortgage is 3.2%. On the bond, the general OPINION is when you sell you do not recover that money in the price of the house.

Everyone's answer as to what makes sense FOR YOU, will be different depending on TAXES and investment money returns.

With the Bond Payment Fee...........The effective rate on bonds are much higher.

[villagetinker]

I would, and have paid the bond off first, much higher interest rate, we got a 3% mortgage.

[Velvet]

Question: I just bought a home with an outstanding bond, no mortgage, if I pay off the bond, then when I resell (if I ever do) the house price has to include my costs. Then the buyer would have to pay property tax on the increased cost of the house because I had paid the bond. Otherwise, they’d have to pay property tax and have the choice of paying off the bond or not themselves. Which would a buyer like better?

[dewilson58]

Originally Posted by Velvet

Question: I just bought a home with an outstanding bond, no mortgage, if I pay off the bond, then when I resell (if I ever do) the house price has to include my costs. Then the buyer would have to pay property tax on the increased cost of the house because I had paid the bond. Otherwise, they’d have to pay property tax and have the choice of paying off the bond or not themselves. Which would a buyer like better?

What is your property tax???.........1.5% of your value?? If so and you have a $20,000 bond...........$300 in possible more taxes??............I doubt if that will impact a buyer.


To me........The bond is just an additional cost to my lot.

[Velvet]

... thank you.

[Toymeister]

The poster might find this interesting.

I analyzed the public records of 109 properties in my neighborhood. Three had paid off bonds. If you find a tendency to advise against paying off bonds you can draw some conclusions that most do not.

This other fact is interesting of the three paid off bonds homes all had some premium aspect to the lot. All three had no mortgage.

[Tom C]

Just my $0.02 worth on this subject...

We just purchased a home here in TV after looking and learning for about 18 months and when looking at homes for sale we ALWAYS considered the bond as a DISCOUNT from the asking price. In other words if the house was selling for 100 and the bond was 10, that meant we considered the asking price 90, and worked from there.

That was US, but as in other postings to this thread, some buyers may not think as we do.

PS - we ended up buying a home with NO BOND (one of the reasons that attracted us to the house).

PSS - the ones who say it is best to not pay off the bond are the ones who are getting the 6% from you. If I were selling 6% loans to you against your home as collateral, would YOU buy it?

... just say’n ...

[retiredguy123]

I think that a house being sold with a paid off bond would be a negative for both the buyer and the seller. For the buyers, they must pay more for the house and don't have the option to reinstate the bond. If they buy a house with a bond, they can pay it off any time they want. For the sellers they need to price the house higher to recover their cost to pay off the bond. The only advantage to paying off the bond is to an owner who is not selling anytime soon, and wants to save money on the bond interest payments.

[Fraugoofy]

Ok, except...

The bond on my 2004 villa when I purchased was $4000 in 2012.

I was being charged $800 on my tax bill for the bond alone. I paid it off and still own the villa.

Seven years times $800= I am happy I paid mine off. No admin fee and 6.25% interest saved every year...

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